Slow and steady...

IIPM PUBLICATION

Canara Bank reported 24% growth in overall advances to Rs.985 billion in FY ’07, which is a gradual moderation compared to 31.5% growth in the previous year and 28.6% growth in Q3, FY ’07. “Going forward, we believe credit growth to moderate to around 23-25% in FY ’08 driven partly by policy measures and to some extent by moderation in overall GDP in FY ’08 to around 8.3% (YES Bank estimates). As such, we expect pressures on resource gap to alleviate during the year.” says Shubhada M. Rao, Chief Economist, Yes Bank. “Consumer credit may slow down to 20-25% due to rising interest rate and the base effect,” adds ICICI Bank CEO K. V. Kamath.

However, if one were to have a look at the composition of available resources with banks and the competition they are facing from alternate avenues of investment, moderation in credit off -take will actually give banks some time to work on their resources. To mop up resources to fund the credit growth of over 30% in FY ’07, banks have been scrambling for deposits, which has very obviously pushed up the costs and it’s really a cat and dog fight out there.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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Rashmi Bansal Publisher of JAMMAG magazine caught red-handed, for details click on the following links.

• Hindustan Times Article - Publisher goes underground
• Rashmi Bansal (Editor of JAMMAG)
• Rashmi Bansal (Publisher of JAMMAG)