In an interview with ET Now, Chanda Kochhar , MD & CEO, ICICI Bank, talks about the various issues concerning

the banking sector. Excerpts: Let's start off with your sense of the global situation currently. Given the slowdown concerns, do you think we will manage 7.5% to 8% this year or do you think we would edge closer to 7%? The global situation is definitely quite uncertain, especially if you look at the Eurozone, there is a lot of uncertainty currently and clearly there is a lot of volatility in the commodity prices as well. So, some amount of contagion effect that does come to the Indian economy, but having said that there is this whole momentum of domestic consumption that is still driving economic growth in India and which is very strong. So, to your question of whether we can deliver at least 7.5%, I think we can definitely deliver that much. Yes, if all these uncertainties would not have been there, we would have had the potential to deliver higher. So there is some amount of loss of growth rate so to say that is happening on account of the global scenario. But still our basic growth would definitely be above 7.5%, what I think. Then how much credit growth will the banking sector deliver for this current financial year? With the growth in the region of around 8% or so, you can still expect the banking sector to grow anywhere between 2% to 2.5% of the GDP growth rate. So anywhere between 16% and 18%, I think still the banking sector can grow. Yes, there is some amount of moderation in all sectors, whether it is demand for housing loans or car loans or for new investment announcements for that matter. But at the same time, there are the past projects that are still getting implemented and credit is still getting disbursed for those projects. The past projects which have already started have not been withdrawn or abandoned by the promoters. So in that sense, around 18% growth rate is still possible for the banking sector. So for ICICI Bank in particular will you stick to your guidance of 16% to 18% credit growth for FY12? No, we still feel that we would be able to maintain a growth rate of about 18% or so, which will be in line with the industry growth rate. Which are the key segments which are currently driving credit for the banking sector? Mainly three to four drivers the housing loans, the car and the commercial vehicle loans, and then on the corporate side the working capital finance as well as the project finance. On the NIM side, while you have guided for 2.6% figure this fiscal, do you see some more nearterm pressures as deposits are getting repriced higher with base rate hikes will only kick in later? Quarter on quarter, there could be some periods where pressure could be more and compared to the other quarters. But if I look at the year as a whole, I still maintain that we would be able to maintain the margin at 2.6. Of course within that our domestic margin is already higher than this average. And then we have about 25% of our book which is international, where actually we are improving margins on a continuous basis. So, I still think that for the year as a whole we would be able to maintain at least the margins that we achieved last year.