Non-performing asset levels in the Indian banking industry could likely increase, a top banking industry official said.
An increased level of 'stressed assets' in the banking system could push up the NPA levels of banks, State Bank of India's chairman O P Bhatt, told reporters on the sidelines of a Ficci-IBA organised banking seminar on Thursday.
Banks must prepare themselves with better risk-management systems, Bhatt said.
Pegging credit growth in the industry at around 29 per cent this fiscal, Bhatt said that the overall asset growth in FY09 'remains bullish' because of a high demand.
He, however, said that some segments such as auto and commercial vehicles have witnessed a slowdown in recent times.
The infrastructure and agri-sectors needed more funds, he said, adding there was a huge demand for credit from the corporate sector.
"There is a huge demand for credit from the corporate sector as global funding sources have almost dried up. Most corporates have turned to banks for adequate credit," he said.
On liquidity, Bhatt said that 'it continues to be a big issue' though for the present, there is ample liquidity in