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Sukthankar: new banks have enough opportunities

sukthadarNew banks have enough growth opportunities and these entities will not pose any threat to the existing private sector banks, says Paresh Sukthankar, DMD, HDFC Bank. The market is large enough to support the growth of more new private sector banks, Sukthankar said at an IIFL Investor Conference in Mumbai. “If you look at the last couple of banks that came in, they have done extremely well for themselves, but that does not mean that it has affected the growth rates of say ICICI, Axis or us, which are the older private sector banks,” he said. A four-member panel headed by former RBI governor Bimal Jalan is scrutinising applications for new banking licences, for which 25 entities, including those belonging to large corporate houses are in the fray. Suthankar also said new players will take at least 5-10 years to establish themselves. On the impact of Basel-II norms on banks’ return over equity, he said, “So essentially, if you have to maintain high single digit tier I or low double digit tier I, the peak ROEs will come off.”

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