Private sector lenders Yes Bank and RBL Bank are aiming for a 15 percent loan growth for this financial year, the managing directors and chief executives told CNBC-TV18.
Speaking at the annual banking conference organised jointly by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the the Indian Banks' Association (IBA), RBL Bank MD and CEO R Subramaniakumar said that the bank is performing better and "we have to ensure the growth path is well laid out".
Existing loan products are expected to grow by around 20 percent going forward, he said, adding that the lender will be rolling out new loan products over the next 60-90 days. He expects to continue to see healthy loan growth across segments, while focusing on deposit growth.
“Our deposit strategy was a conscious call ,” Subramaniakumar said. “The number of accounts opened this month is almost double of the previous month. We have a fair amount of liquidity but will start ramping up deposits soon.”
His Yes Bank counterpart Prashant Kumar said that the lender is “clearly” on a growth path and it is growing faster than the industry on the liabilities side.
Rate cues from the RBI are transmitted to the economy when lenders adjust their lending and deposit rates based on the RBI's rate actions. For instance, if the RBI hikes the repo rate, then banks will have to borrow short-term funds at a higher cost from the central bank. Banks are also expected to pass on the benefit to borrowers by offering high-interest rates.
According to bankers and experts, the war over deposits is likely to continue as the RBI hikes rates further and as credit growth continues to expand. This could happen through aggressive deposit mobilisation in the coming months, said bankers. Analysts and economists expect the RBI to increase the repo rate to 6.50 percent by March from 5.90 percent.
Yes Bank’s Kumar said that he expects cost of deposits to go up from here but there will be no impact on margins as loan rates will also rise going.
The bank is in the midst of some legal process and will conclude the transaction with JC Flowers ARC in November. Yes Bank had announced on September 20 that its board has approved the sale of $6 billion stressed debt to private equity firm JC Flowers after it received no challenger bids to JC Flowers' base bid for the Rs 48,000-crore NPA portfolio.
Yes Bank does not need an RBI approval to acquire up to 9.99 percent in the asset reconstruction company, Kumar said. “We will first invest 9.99 percent in the ARC and then approach RBI when we want to increase stake,” the CEO said.
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