Green shoots are beginning to become visible as far as investment cycle is concerned led by government spending in the infrastructure sector, Kotak Mahindra Bank whole-time director Shanti Ekambaram said.
"I think the last 18 months have been very good on the consumer credit side but you are beginning to see green shoots even in the investment cycle," she told PTI.
The government focus on infrastructure development in the last three years has created space for capital expenditure by the private sector as well.
"I think it is moving from infrastructure led by government spending to capex although in a small way but I think that is going to build up," she said.
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Asked about RBI's tightening norms for unsecured consumer credit, she said, whenever the regulator perceives excess, they do so.
NBFC and fintech have been aggressive on lending small ticket unsecured loan in the last 6 to 12 months.
"They just put out the caution to say you need to provide for more capital...banks are looking very stable even now when you look at the small ticket," she said.
Financial sector needs to be cautious and keep a vigil on pockets of exuberance, she said, adding, "it is said that the worst mistakes are done in the best of time."
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Last month, RBI revised norms wherein risk weights increased by 25 percentage points will not be applicable on certain consumer loans, including housing, education, and vehicle loans.
Besides, the norms will not be applicable on loans secured by gold and jewellery. These loans will continue to attract 100 per cent risk weight.
Higher risk weight implies that banks have to keep aside more money as a buffer when it comes to unsecured personal loans. As a result, the capital adequacy ratio of banks would see a decline.
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