New Delhi [India], April 23 : Banks are adopting a "wait and watch" approach on macroeconomic risks amid geopolitical uncertainty, Sameer Shetty, Group Executive, Digital Business & Transformation and Strategic Programs, Axis Bank, told ANI on Thursday.
"At this point, it is all wait and watch because if you look at all macroeconomic indicators, even marks seem quite good. Outside of oil prices and supply chains, the other stuff is looking in good health. So we have to wait and watch," Shetty said.
Speaking to ANI on the sidelines of the 6th Edition of PICUP Fintech Conference organised by the Indian Banks Association with FICCI, Shetty said the evolving geopolitical situation, particularly in West Asia, has made it difficult to assess the outlook with certainty.
"Our last read was 15.5%, which is quite strong growth. Having said that, we are now in the middle of this geopolitical situation. So, it's very difficult to tell, depends on how this situation evolves," he said.
On the trajectory of credit and deposit growth, Shetty said outcomes would depend on how quickly the situation stabilises.
"If the war in West Asia concludes very quickly, then I think we can come back and then it will be quite good. But if it does go long, I think that will create some challenges and maybe we will have a slowdown of credit. So it depends, it's very difficult to tell," he said.
On risks such as oil prices and currency fluctuations, Shetty said the approach remains cautious and dependent on how the situation evolves. "If it does go wrong, then we have to think about some actions but optimistically it will not and then the economy can bounce back quite quickly," he said.
On monetary policy, he said the central bank is likely to remain data-driven.
"I think firstly RBI can only comment, but if you look at the governor's speech, his direction to everybody is to also be data driven and see how the situation is evolving and appropriately take some actions," he said.
Shetty further added, "So I don't think at this point in time anybody has a good view. It is very variable; every day, something is changing. So it is very volatile and we have to wait and watch. I am sure RBI is thinking about this and in the right time they will take some actions".
On asset quality, he said there are no immediate signs of stress in unsecured or MSME lending segments, though vigilance is required.
"At this point, no, but again, as I said, it is a very fast-evolving situation, so we have to keep an eye out," he said.
He also highlighted that the bank continues to invest in strengthening systems to protect them from digital fraud.
"So we have a dedicated cybersecurity team. A lot of our investments go towards cybersecurity. It is perhaps the largest growing spend area for us over the last few years. Same digital frauds again a big area of focus for us," he said.
Shetty added that "there are many things we are doing around technology, customer education, and our own processes to ensure that we can better address this."