'Meaningful lowering of funding cost only in three-four quarters'

UMESH Revankar, executive vice-chairman of Shriram Finance the largest vehicle financing non-banking lender is hopeful of high double-digit growth this fiscal and closing the year with a ₹3 lakh crore loan book, up from current ₹2.72 lakh crore.

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In an interview with Benn Kochuveedan, he calls for a dedicated refinancing window for NBFCs, similar to how housing finance companies have access to the NHB or further strengthening Sidbi's existing refinancing programmes.

What is holding back corporates from investing, leave alone taking credit from financial institutions? Urban demand has slowed down a little but rural demand has been good. For us, overall credit growth has been on expected lines. We are targeting 15% but grew 16% in Q1. So, we are comfortable with the growth rate as rural demand is still holding up.

Yes, it is a fact that capacity utilisation levels have not really grown. Normally, in the past, manufacturers would go for expansion once they reach 70-75% capacity. This time around, they are at 80-85% but still not going in for expansion. Perhaps, the reason is that disruptions have become more frequent, and as a result, no one is willing to commit to long-term investments. That could be the underlying cause for missing capex cycle by private sector.