Robust loan growth for banks this fiscal
Stable macroeconomic conditions, govt’s policy push keep banking sector in sweet spot, says BoM MD
image for illustrative purpose
New Delhi: With the Covid worries fading, the banking sector is set to register robust growth in the current fiscal on the back of stable macroeconomic conditions and growth-oriented policies of the government, said Bank of Maharashtra (BoM) Managing Director AS Rajeev.
The banking sector is at an inflection point with Covid-19 related-problems yielding place to the regeneration of demand in all segments of the industry and overall optimism in the economy, Rajeev told PTI. The banking sector seems to be in a sweet spot and expected to post good growth in the current year, provided there are no external issues like a fresh Covid-19 wave and sustained geopolitical tension, he said. As far as the retail segment is concerned, Rajeev said, the housing sector is growing very well, but there are some issues with vehicle loans due to chip shortage. Expressing optimism, he said sales are expected to gather momentum later during the year, with the chip shortage issue being addressed. Loan growth in the agriculture sector is over 10 per cent, and a good monsoon would generate demand in the rural areas as well, he said.
"The demand from the corporate sector has also started gaining, except pick up from the manufacturing sector. My sense is that with a capex push from the government in the Budget, it would stimulate demand from manufacturing," Rajeev said.
Finance Minister Nirmala Sitharaman raised capital expenditure (capex) by 35.4 per cent for the financial year 2022-23 to Rs 7.5 lakh crore to continue the public investment-led recovery of the pandemic-battered economy. The capex for the year gone by was pegged at Rs 5.5 lakh crore. Once the Russia-Ukraine war is over and crude prices stabilise, the upward bias on interest rate should also ease, he said. It is to be noted that no public sector bank (PSBs) has faced any loss in the April-December period of 2021-22 and clocked a collective net profit of Rs 48,874 crore during this period. The public sector banks earned a combined net profit of Rs 31,820 crore in 2020-21.
