With the Reserve Bank of India (RBI) about to see a new governor soon, equity and debt markets have started speculating the name of the person who will come after the outgoing governor, Raghuram Rajan. And with it come guesses on whether the new governor will cut interest rates or not. Mint caught up with Sudhir Agrawal, fund manager and executive vice-president at UTI Asset Management Co. Ltd, to find out his thoughts on this. Agrawal has been the fund manager of UTI Short Term Income Fund, which is part of the Mint50—Mint’s curated list of 50 mutual fund schemes. Edited excerpts:
Do you think the slow pick-up of credit growth is a worry? Or is this a passing phase?
A lot of the so-called high credit growth we saw in the past has now turned into non-performing asset (NPA). This problem is acute in the case of public sector banks, probably because they had stiff targets earlier to grow their balance sheets in terms of deposit and credit growth. They were more aggressive in lending and ignored credit rating standards. That is probably one of the reasons why there was high credit growth in the past.
