MUMBAI : Keen to capitalize on the current drive for adoption of electric vehicles (EVs), Axis Bank is looking to finance dealers as well as retail buyers of the vehicles. Sumit Bali, group chief executive and head of retail credit and payments at Axis Bank said while the private lender has recently tied up with Tata Motors for financing EVs, there is more in the pipeline and the bank sees huge potential in this space. Edited quotes:

How has demand been this year’s holiday season?

Demand has been very high and for us, the credit card business is a good measure of consumer confidence. Naturally, we used to see March as the highest month ever for card spend, only surpassed by the festive season. This year, June was better than March and later too, the trend has been good in both discretionary and non-discretionary spending categories. These include transportation, hotels, restaurants and many more. On a month-over-month basis, usage is very high, so that gives you the impression that customer confidence is good. That, therefore, is also seen in other products like personal loans. Even the demand for business loans or loans for the self-employed has been very good. We have not seen any change due to the increase in interest rates. Part of it is a pent-up need as well. You spend money on discretionary items when you are sure of the future. People are willing to spend and bet on future income rising.

What are your thoughts on the EV financing space right now and how does Axis want to tackle it?

We are looking at financing customers as well as merchants. The idea of ​​having such a unique partnership (with Tata Motors) was that this market will grow many times instead of growing at 15-20% every year. Our sense is that as more players come into this field led by local manufacturers like Tata or Mahindra, the space will continue to grow. It is also attracting new players from international markets. Loan rates are the same as conventional cars. Although the interest rate is similar, they have a price advantage because many states allow some incentives for EVs. We are interested in sponsoring entrepreneurs because we think that will be an important enabler to develop this sector. Businesses will need working capital loans. Right now, everything is tight but hopefully, once the chip situation settles down and inventory levels return to 30-45 day levels, we will see working capital demand for EVs. We are in talks with other developers as well. The entire EV space will see a lot of action. We think it is an important part for the future and we want to invest early.

How are branded credit cards doing?

In credit cards, all the partnerships we had are growing well and are good engines for organic card issuance growth. Flipkart Card is growing at a good pace and we have a partnership that we have just started and we will start showing results. Currently, one-third of our offerings are branded cards and the experience on those is slightly better than regular credit cards.

Do you see any change in the rate increase after the home loan demand?

The demand for conventional home loans is very high. During covid, prices had collapsed due to lack of demand. Since then, we have seen a slight increase in prices by builders which is a sign of confidence that at that price, the calculation continues. We have not seen any impact on demand in the conventional home loan segment and that is what is driving the growth. In the last three months, we have been amazed at the kind of usage we are seeing. Other segments of retail credit have also been good.

Is there a greater trend in rural areas at the moment?

In the rural part in general, the bank is very good and that is why there is a high level resource that looks after it. They build cooperation, distribution and strengthen its breadth and depth there. We will distribute assets and liability products and that continues to be the focus area of ​​the bank and is a set strategy.

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