In this episode of the Current Account podcast, Hamsini Karthik and Karthik Srinivasan, group head financial sector ratings ICRA, talk about retail lending.

Karthik Srinivasan provides valuable insights into the trends in asset quality for both public and private sector banks, emphasising the expected improvements in the coming quarters. He highlights why private sector banks may experience slightly higher slippages.

The conversation also looks at the difference between public and private sector banks in terms of lending portfolios and profitability.

The episode covers the performance of retail loans and the data points that suggest a reduction in default rates.

Karthik Srinivasan explains the factors behind this trend, including the use of data for underwriting, monitoring, and collections. The discussion also explores pricing strategies and the market dynamics influencing them.

The need for capital raising is examined considering the growth assumptions, shedding light on the challenges and opportunities facing banks in the current financial landscape.

The podcast concludes with an outlook on the future of retail asset quality and the absence of a looming bubble, at least in the near term.