Icici To Stick To Sub-5% Sticky Asset Ratio Target

ICICI today told the government that it would stick to its target of reducing non-performing asset (NPA) ratio to below 5 per cent during the fiscal, while maintaining a healthy 15-20 per cent growth in sanctions to about Rs 67,300 crore.

"We are targeting a 15-20 per cent growth in sanctions and disbursements this fiscal," ICICI managing director K V Kamath said after a meeting with finance secretary Ajit Kumar.

ICICI's sanctions are expected to be in the range of Rs 67,300 crore as against Rs 56,092 crore last fiscal, while disbursements are targeted at about Rs 38,300 crore compared with Rs 31,965 crore in 2000-01.

 

ICICI has made the projections on the basis a recovery in the manufacturing sector, which according to the institution would pick up in the third quarter of this fiscal.

"The growth in the manufacturing sector is still slow. With good a monsoon, we expect demand in the manufacturing sector to pick up from the third quarter," Kamath said.

ICICI also plans to raise Rs 4,000-4,500 crore through bonds issue during the financial year.

Of this Rs 500 crore has already been raised, Kalpana Morparia, executive director, said, adding that the institution would come up with its third tranche of bonds issue for raising Rs 400 crore shortly. ICICI also discussed the transition to 'universal banking' with the government.

Kamath said the "common paper" of domestic financial institutions envisaged that infrastructure lending be regarded as priority sector lending while the statutory liquidity ratio (SLR) and the cash reserve ratio (CRR) be treated on an incremental basis.

FIs, including ICICI and IDBI, had submitted the common paper to government and reserve bank for the universal banking concept.

After the government and RBI approve the proposal, ICICI would merge its subsidiaries and offer a wide range of financial products under the same roof.

ICICI, which is listed on the New York Stock Exchange, plans to open a representative office for its banking arm ICICI Bank in New York and London, Morparia said.

"We are awaiting regulatory permission for opening the overseas offices," she said.

Kamath said, over the next three years, the institution would have a major presence in the foreign markets with Lalita Gupte at the helm. At present, a team for foreign operations is being put in place and blueprint will be prepared shortly.