MUMBAI (Reuters) – India’s AU Small Finance Bank (AUFI.NS) expects its outstanding loans to grow by 27% to 28% this financial year. A police officer told Reuters on Tuesday.
“We expect this type of (credit) growth momentum to continue,” Sanjay Agarwal, managing director and CEO, said in a telephone interview. The bank is targeting deposit growth of around 29% to 30% in 2023-24, Agarwal added.
AU Small Finance Bank’s deposits grew 32% year-on-year, but loans registered a 26% increase in fiscal year 2023, slower than the 33% increase in the previous year.
Bank prepayment growth is much higher than that of the industry. The latest data released by the Reserve Bank of India (RBI) showed bi-weekly bank credit growth of 15.7% for designated commercial banks as of 7 April.
Local media reported last week, citing sources, that the RBI had asked banks to curb advance growth last year.
Agarwal said this was in “normal exchanges”. “They (RBI) will always advise us. That’s their right. But it’s the board and the management that decide what to accept and what to complain about,” he added. .
“The RBI has not singled out any banks,” Mr Agarwal added.
AU Small Finance Bank’s total non-performing assets (NPA) ratio was 1.66% at the end of March, compared to 1.98% last year. The net NPA ratio was 0.42%, compared with 0.50% in March 2022.
The lender does not plan to raise new capital over the next 18 months and plans to add 100 new branches this financial year.
Reported by Siddhi Nayak.Edited by Eileen Soren
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