The credit disbursal for banks has come to a slow down, according to O P Bhatt, Chairman, SBI. He also said the present growth rate of 19 – 20% is not adequate for increasing interest rates.
Bhat said, “The economy is growing at 8-9 per cent. It is a mystery to me also because the credit offtake is low compared to what we are expecting. Though there is slight pickup, it is still not enough”.
Discussing the likely cause for this decline, he said that there may be other available options of credit which are likely to be more attractive to borrowers.
He also said, “May be better productivity, better management in the system could also be the reason”.
The weakly increasing loan portfolio has been a prime worry for banks after Q1.
While stating the bank’s plans of easing foreign buyout till the period of some stability in world financial situations, he said, “Because of the nature of the financial institutions across the world, nobody is sure of what kinds of assets are available and surprises are available. Acquisitions wise I don’t think so there will be anything concrete come out in the financial year”.