Budget Analysis: Private banks get a level-playing field: Chanda Kochhar

Reacting on the Budget, Chanda Kochhar, MD & CEO, ICICI Bank says  interest subvention has been extended to private sector banks is a good news.

Below is the verbatim transcript of her interview on CNBC-Tv18 Q: Your thoughts first on what the Finance Minister (FM) had to say about extending the interest subvention to private sector banks as well and how much of a negative you think it is going to be for the space? A: First of all, the fact that that the interest subvention has been extended to private sector banks is a good news because private sector banks have been given a level-playing field vis-à-vis the public sector banks. So, the issue is that so far private sector banks were not able to do this kind of business at all because there was no level-playing field. In that sense it is a positive enabling factor. Finally, it all depends on the quality of business that you pick up and the credit parameters that you set in this business for yourself. Q: The criticism against that process with public sector banks is that there is really no timeline on where that other 4 percent that is supposed to be re-substituted by the government comes in. Does that not increase uncertainty for private sector banks especially with regard to farm or agri loans? A: No, infact in a way it gives a certainty to say that anyway priority sector obligations are applicable to all public sector and private sector banks. With that common applicability, if there was one set of bank that could do business with two percent interest subvention, I think it was unfair for the private sector banks. Hence, it is actually a very large enabling factor for the private sector banks to go out there and pick up the business, which they think is good quality business.