GO
Loading...

India’s economy is out of the woods: ICICI CEO

After India's growth rate halved over the past few years, the worst is finally over, says Chanda Kochhar, chief executive officer of ICICI Bank – the country's largest private sector bank.

"The worst is over…export-oriented companies are doing better because of the adjustment in the rupee. We brought a lot of control on our current account deficit (and) the government is quite focused on [controlling] the fiscal deficit," Kochhar said on CNBC's Managing Asia.

"All of those things have meant that we've brought the slide down to an end," she added.

However, the recovery in Asia's third largest economy will be slow and gradual, says Kochhar, and will largely depend on a revival in investments.

(Read more: US-India spat: Watch it, don't fret it)

India's slowdown has posed grave challenges for the country's banking sector, which has seen a spike in nonperforming assets as companies struggle to repay loans.

Dibyangshu Sarkar | AFP | Getty Images

Bad debt at Indian banks rose to 4.2 percent of total loans at the end of September, nearly doubling since 2009, according to data from the central bank.

Kochhar says while she is "confident" about ICICI's asset quality, the bank's corporate loan portfolio is being actively monitored.

(Watch now: ICICI: India's Growth Story Is Back)

"If you look at the consumer side of the portfolio, which is mortgages, car loans, there is actually no pressure at all. But when you look at the corporate side, I think the stress is different across projects," she said.

"Power projects are differently placed to road projects. There's difference stress across different companies across different groups based on their leverage levels. So it's a time of heightened monitoring and control," she added.

Despite India's sluggish economy, Kochhar expects the country's banking sector will continue to grow at double-digit rates.

(Read more: India's Rajanin tough spot as stagflation risk emerges)

"My belief is India's banking industry will continue to grow at two and a half times the GDP [gross domestic product] growth rate," she said. India's economy is expected to register a growth rate of less than 5 percent in the year to March 2014, well below the near double-digit growth seen in 2010.

For ICICI, this expansion will come from increased focus on the bank's secured consumer lending business including home and car loans.

"This is prudent approach because the credit experience around these products has been very stable even during the lowest of economic cycles," she said.

—By CNBC's Ansuya Harjani. Follow her on Twitter: @Ansuya_H

Contact Managing Asia

  • Upcoming Event

    Friday, 03 October 2014


    Managing Asia: Asia Builders
     

    A thought-provoking discussion on finding compelling growth in Asia in the face of slowing emerging economies. This event will augment the exchange of knowledge and cement networks with the region’s distinguished builders of the future. Serge Pun, Chairman, SPA Group, and Jonathan Stein, Managing Director, Skidmore Owings & Merrill, together with other renowned architects and business leaders will participate in this lively panel discussion.


     

    Click here to find out more.



    About Managing Asia

    "Managing Asia" is the Asia Pacific region's ground-breaking interview programme featuring CEOs, entrepreneurs and other business leaders. Hosted by award-winning anchor Christine Tan, the show looks at what makes the region's corporate titans and top entrepreneurs tick.


    Showtimes

    Asia (SIN/HK)

    Friday 17:30

    Saturday 06:30, 13:30, 15:00, 18:00

    Sunday 06:00, 10:00, 20:00


    Australia (SYD)

    Saturday 08:30, 18:00

    Sunday 01:30, 06:00, 08:30, 10:00, 12:30, 17:00, 20:00

    Monday 01:00, 07:00


    New Zealand (NZ)

    Saturday 10:30, 20:00

    Sunday 03:30, 08:00, 10:30, 12:00, 14:30, 19:00, 22:00

    Monday 03:00, 09:00


    Europe (CET)

    Saturday 03.30, 06.30, 09.30

    Sunday 00.00, 02.30, 05.00



    Contact