Loan portfolio composition poses challenge for banking industry: PwC's Sanjeev Krishan

Chairperson of PwC in India, Sanjeev Krishan, in an exclusive interview with Shereen Bhan of CNBC-TV18 at PwC Banking Dialogues, highlighted the need for the Indian economy to maintain a stable trajectory as he believes the composition of the current loan portfolio could pose a challenge to the banking industry. He said the rising credit cost has started to affect consumers, and so, consumer companies are grappling with reduced demand.

He said, "If you look at the panel, we did just two weeks back, and we had a bunch of consumer CEOs on the panel, and they told us that growth was slowing down... the credit hike.. .the credit cost is now starting to pinch the consumer. I think it is definitely a good time from the bank's standpoint... I think the fact that they have cleaned up the balance sheets, the NIMs are going up over the last two years. I think they are all good things."

"But I am also slightly concerned when we look at the way banks have grown their balance sheets and lot of it is actually driven by the retail look. The economy needs to continue to be in good stead, and there are certainly areas that were identified... which could challenge the economy... and because of the composition of loan portfolio, that could be a challenge that they may face,” he added.