‘You Shouldn’t Use Govt’s Re­sources to Clean Banks’

The Economic Times - - Money - “In my view, the fair value of ru­pee should be 72-73 against the US dol­lar. We have not de­pre­ci­ated when all other cur­ren­cies have. In the last three years, ru­pee has been sta­ble. It­should de­pre­ci­ate 7-8% to re­main com­pet­i­tive on ex­ports and im­ports front

From ET Mar­kets Page 1

Wsell ₹ 1 lakh crore a year. One of the things we should do is give them fund­ing. ARCs can put ₹ 8,000₹ 10,000 crore ev­ery year to buy as­sets and an­other ₹ 8,000 crore-10,000 crore as ex­tra fund­ing to get those as­sets back on track.

Will list­ing of se­cu­rity re­ceipts (SRs) help in re­solv­ing NPA prob­lems? SR works be­cause it gives you the flex­i­bil­ity to meet the needs of the buyer and the seller. It is a con­vert­ible deben­ture. We need mar­ket­based so­lu­tions. We don’t need the gov­ern­ment money. Af­ter RBI did the AQR process, they came out with the es­ti­mate of ₹ 8 lakh crore, which is stressed and po­ten­tial stress.

Will you ap­ply for a uni­ver­sal bank li­cence? We are at ₹ 35,000 crore of as­sets. We will dou­ble in five years. We have some room to grow. In last five years, we have grown at 35%. Banking struc­ture is go­ing through a change. Bank branches were big as­sets three years back. Now, they are say­ing it is a cost cen­tre. Pay­ments so­lu­tions have hit banks. ATMs are un­sus­tain­able now. Tech­nol­ogy is such a big dis­rup­tor that not do­ing any­thing for three years is bet­ter.

Will you look at ac­qui­si­tions to grow your busi­ness? We will if it strate­gi­cally make sense. We have done eight ac­qui­si­tions in the past 15 years. We are con­stantly look­ing at it. We look at 1-2 busi­nesses ev­ery quar­ter. We are very keen to ac­quire any re­tail busi­ness. In­dia is a great start-up coun­try. But to go from start-up to scale-up is very dif­fi­cult. There are a lot of MFI and re­tail credit com­pany. We like small ac­qui­si­tions. We will never take big risks. But surely some small risks. Where do you see ru­pee in the short to medium term? Ru­pee has ap­pre­ci­ated. The fair value of ru­pee should be 72-73 against the US dol­lar to be com­pet­i­tive. We have not de­pre­ci­ated when all other cur­ren­cies have. In the last three years, ru­pee has been sta­ble. Ru­pee should de­pre­ci­ate 7-8% to re­main com­pet­i­tive on both ex­ports and im­ports fronts. When we have in­fla­tion of 4-5%, ru­pee should de­pre­ci­ate. The ru­pee-pound has ap­pre­ci­ated dras­ti­cally. If you are ex­port­ing to UK, you are hurt badly.

Do you ex­pect RBI to cut rate? I think they will wait to see the com­plete im­pact of de­mon­eti­sa­tion. RBI will not cut rates be­cause GDP is fall­ing, but be­cause in­fla­tion is cool­ing off. If they cut, it will be about front-load­ing. Will they like to front­load, given the elec­tions are round the cor­ner, I am not sure.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.