She told Business Standard that there was sufficient scope to grow even within the existing regulatory framework. Excerpts:
How do you see the slowdown affecting you?
We have no fear as the growth is pretty robust. Our report said the economy will grow at 8.5 per cent this year, compared to 9 per cent last year. There is enough growth for us and we are very bullish.
Are any sectors seeing a slowdown?
There are segments that are waiting to see the way interest rates would move. But the demand for money continues, though access to capital markets is drying up.
The recent changes in rules on external commercial borrowings (ECBs) will offer more avenues for companies to raise funds since the underlying demand exists. The M&A environment will get active. Wherever it is a cash deal, there is no problem. But if there is debt, it is not as easy as it was in the past.
How is retail banking doing as the delinquency rates are rising?
Yes, the delinquency rates are up. But we are fortunate that we are not in the vehicles business. Consumer finance is again a segment we do not play in. The credit environment is showing stress and NPAs (non-performing assets) are marginally up.
As a percentage of net advances, NPAs rose to 0.58 per cent at the end of March this year compared to 0.43 per cent last year. We are keeping a close watch, but not everything is bad. There are segments that pay well and yet not show any stress. So there is a lot of scope to grow these segments.
How much capital will you get into the bank?
The (HSBC) group has allowed us to retain profits and we are generating good profits. We have a comfortable capital adequacy ratio. So there is some cushion. There is every indication that the group will support growth. I am not saying that we need capital. But when support is required, we will get it.
Will you also look at an IDR (India depository receipt)issue?
IDR is an avenue to raise funds. Whether we raise funds abroad or within the country are options that are available. But we are not looking at this at the moment. New instruments need not always work. The GDR market, where lot of people rushed in, is not always liquid.
What is your plan post April 2009?
We will continue to grow. We will wait and see what the (RBI) guidelines say (on further opening up) and we are optimistic of change.
What if nothing changes?
We have been able to grow at a pretty fast clip in the exiting regulatory set-up. So, the ability to grow in a compliant manner is possible in an economy such as ours and we are not disturbed or upset with what we have.