Individuals to drive banking growth in India

India’s bankers remain confident that extending credit to individuals is the correct path to growth.

HDFC Bank Ltd, ICICI Bank Ltd, Axis Bank Ltd, Dena Bank, Union Bank of India and Central Bank of India expect to loan more than the government’s 17% credit growth target, mainly on demand from individuals. Bankers see a softening of demand from corporate borrowers such as those in infrastructure this year.

ICICI Bank, India’s largest private sector bank, foresees credit growth to rise 20% this year mainly on demand from individuals for homes and cars. The bank expects its retail assets to grow faster than it did in fiscal 2012.

HDFC Bank is confident of growth ranging from 3% to 5%. It saw unusual growth for its retail sector last year but foresees more growth from industry but depending on the country’s economic growth.

IDBI Bank Ltd sees credit growth at 15% while Bank of Baroda, Punjab National Bank and Bank of India expect credit growth to range from 18% to 19%.

Despite being hobbled by bad loans and a restructuring of assets, public sector banks see demand from individuals as essential to achieving their growth targets.