Speaking at the Business Standard Banking Round Table, Sharma also said credit growth to the corporate sector has been relatively weak
The retail and medium-sized enterprises sectors have been showing credit demand but the banking industry is worried that they could be the next bubble, said Axis BankManging Director & CEO Shikha Sharma while speaking at the Business Standard Banking Round Table 2016.
Sharma also pointed out that credit growth to the corporate sector has been relatively weak and that working capital demand has also been depressed. Stressing further on the point, she said that corporate India has not seen any new projects coming up in the past 18 months and working capital demand had also been depressed.
Sharma said that the reason for the slow growth was that there was a base effect issue as large project funding had taken place three years back.
The Business Standard Banking Round Table, 2016, started on Thursday, with the finest minds in Indian banking coming together and sharing their thoughts on some of the critical issues in not only the banking industry but also the economy at large.
Relatively, on a brighter note, she said that there was a lot of headroom for growth in retail credit and that Axis Bank continued to be optimistic in that regard. She added that corporate credit would also come back, along with investments.
Axis Bank's top management has decided to take home a reduced variable pay, as the lender's performance came under pressure in the last financial year due to mounting bad loans. "The top management will take a cut in the variable pay of anywhere between 20 and 50 per cent. The quantum will depend on various factors, including their role and the departments they work for," said a top Axis Bank official. Apart from the top management that includes about 100 employees, the rest of the employees in the bank will remain insulated.
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