Notwithstanding an imminent deceleration in the Indian economy, State
Bank of India expects a 22-24 per cent credit growth in 2008-09 on the
back of demand from segments like housing credit.
The genuine demand for housing loans still existed, while speculative
demand for these loans had receded. The demand in some pockets like
Gurgaon was saturated, but the middle class in tier-II and tier-III
towns, where ticket size was small still sought credit, said SBI
Chairman O P Bhatt today.
The home loan credit growth has dropped sharply across banks in the
last one year due to a substantial rise in the lending rate. The
increase in the amount paid for monthly loan repayments and elevated
property prices have had an adverse effect on the home loan demand.
At the beginning of the year (January 2008), the bank had set a high
internal target of over 30 per cent growth in credit. However, with a
sharp rise in inflation and global uncertainty, expectations about
growth have tempered somewhat, another SBI official said.
Bhatt was optimistic about the Indian economic growth story. "Nothing
that has happened in the past three to four months has dampened my
optimism," he said at a discussion on the Indian economy organised by
the Federation of Indian Chambers of Commerce and Industry.
There is a need to build capacity in the economy, while there are
worries about rising energy prices. But prospects for economy should
not be assessed in a short period, he added.
Bank of India expects a 22-24 per cent credit growth in 2008-09 on the
back of demand from segments like housing credit.
The genuine demand for housing loans still existed, while speculative
demand for these loans had receded. The demand in some pockets like
Gurgaon was saturated, but the middle class in tier-II and tier-III
towns, where ticket size was small still sought credit, said SBI
Chairman O P Bhatt today.
The home loan credit growth has dropped sharply across banks in the
last one year due to a substantial rise in the lending rate. The
increase in the amount paid for monthly loan repayments and elevated
property prices have had an adverse effect on the home loan demand.
At the beginning of the year (January 2008), the bank had set a high
internal target of over 30 per cent growth in credit. However, with a
sharp rise in inflation and global uncertainty, expectations about
growth have tempered somewhat, another SBI official said.
Bhatt was optimistic about the Indian economic growth story. "Nothing
that has happened in the past three to four months has dampened my
optimism," he said at a discussion on the Indian economy organised by
the Federation of Indian Chambers of Commerce and Industry.
There is a need to build capacity in the economy, while there are
worries about rising energy prices. But prospects for economy should
not be assessed in a short period, he added.
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