Amid stuttering loan demand, ICICI Bank to offer holistic solutions to corporates

MUMBAI: With corporate loan demand stuttering amid difficulties on the economic front, ICICI Bank on Wednesday launched a solution, aimed at profiting by offering a wider set of services to high-value clients.

The second-largest private sector lender also said that the corporates are slower in adopting digital solutions as compared to the retail segment, and added that the solution focuses on tech-based new age offerings.

It can be noted that even before the pandemic, corporate loan growth was trailing for banks, which shifted focus to the more resilient retail segment amid asset quality reverses on the large value loans.

Some experts say with demand affected, corporates are unlikely to up their investment activities, which typically result in loan growth.

“Availing the credit for a reasonably good corporate is not an issue today.

"We are sitting on excess liquidity, credit demand is not much,”" ICICI Bank executive director Vishakha Mulye told reporters over a call.

Underlining the importance of the ecosystem approach it has taken, she said a corporate needs a trusted partner, who will handhold and help manage business holistically.

Its newly launched 'ICICI STACK will provide digital banking solutions to corporates, their channel partners, employees and other stakeholders.

The platform is initially available for 15 sectors and also includes eight dedicated 'ecosystem banking' branches in the financial capital (five) and national capital (three).

Mulye explained that apart from generating loan demand, the initiative will help get an entire ecosystem of vendors of corporates to the bank, start salary account relationships and result in other banking relationships on trade finance and transaction banking.

Answering a question on whether it expects revenues from fees or interest income, she said the lender is not looking at it from a line-by-line perspective and expects the initiative to play into the overall profits.

Mulye said 90 per cent of the bank's retail transactions have moved away from paper-based systems like cheques and termed the adoption of digital alternatives among corporates as “low”.

Corporates have doubled up on digital transactions, but have a long way to go on it, she added.

Asked about the bank's corporate loan demand outlook, Mulye said she feels India will grow after the ravages of the pandemic and the same will come from both investment and consumption.

She exuded confidence that in such a scenario the corporate loan demand will also fire up, and added that its corporate loan book is a function of the opportunities in the market.

The bank had witnessed a 13 per cent growth in corporate advances in the March quarter as against 20 per cent on the retail front, and overall domestic loan growth of 18 per cent.