ICICI Bank expects corporate demand to pick up as economy rebounds

which has been cautious on bulky corporate lending is getting back to increasing exposure to companies as it believes that company balance sheets will also grow as India‘s economy recovers from the disruption caused by the Covid 19 pandemic.

Executive director Vishakha Mulye said the bank expects corporate demand also to pick up in the next economic cycle.

“For India to grow faster post the pandemic both investment as well as consumption demand will have to fire. We 100% believe that corporate demand will pick up,” Mulye said without elaborating how much she expects the growth to pick up.

The bank has doubled the number of current accounts in the last year, Mulye said. She did not give the number of current accounts the bank currently services. Corporate loans constitute 45% of the bank’s Rs 7.33 lakh crore loan book.

On Wednesday, it launched a new digital banking product which will provide transaction services, credit facilities, advisory and M&A services for companies and their vendors. The bank will also offer savings bank accounts to the company employees which will help it build its deposits.

Mulye said the new comprehensive digital offering will help the bank connect with companies their vendors and also employees providing it with valuable information to assess the financial health of their clients besides multiplying opportunities for business.

The bank will offer this new product to 15 industries initially, like information technology, pharmaceuticals, steal and financial services across eight branches, give in Mumbai and three around Delhi. Another four branches focussed on these services will be launched later this fiscal.

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“Providing services together to companies, their vendors and also to retail customers will bring down the cost of assessment and risk….we are excited about this opportunity and the feedback we have received from companies has also been good,” Mulye said.

In the last few years ICICI has invested in digital technologies both on the retail and corporate side as it looks to take advantage of the easy adoption of digital mode in India.

In December it had opened a similar online one stop window for multinational companies (MNCs) wanting to establish or expand in India seeking to take advantage of the country’s potential as an alternative to China and benefit from the challenges foreign lenders face by new regulations in India.

Mulye said even though easy liquidity and slow growth post the pandemic has hit credit demand, there is potential in improving collection and payment efficiencies which will bring down working capital cycles.

“In sectors like steel these working capital cycles sometimes stretch to six months. We can bring in efficiencies to bring it down to a few days which will reduce the cost of doing business. There is a lot of public infrastructure from which data can be collected like the GST network through which can make tailor made solutions and capture payments of vendors to reflect the financial position of the company,” Mulye said.

The bank will also offer trade and foreign exchange services, electronic bank guarantees, automated stamping, real time reconciliation system of collecting funds from multiple parties and also supply chain management.

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