Date:09/11/2008 URL: http://www.thehindu.com/2008/11/09/stories/2008110960011500.htm

Business

Downturn: credit quality may be impacted

MUMBAI: The current economic downturn and a continuation of liquidity shortage in financial markets might push up defaults in the small and medium enterprises (SME) segment, an ICICI Bank official said on Saturday.

“The flow of money from large companies to small ones is becoming slower. Credit cycles are becoming extended... if it (the current market situation) continues for some more time, credit quality may get impacted,” ICICI Bank Senior General Manager, SME, Vijay Chandok, told reporters here on the sidelines of a FICCI-IBA organised seminar. Rising bad loans and continuing liquidity issues in the banking industry prompted ICICI Bank to scale down its lending in various portfolios and it has targeted a 20-25 per cent asset growth in the current fiscal, he said.

The bank’s SME loan book was expected to grow at a slower pace in the remaining part of this fiscal. — PTI