“Axis Bank will extend its financing to the electric vehicle sector”

Bombay : In an effort to make the most of the current trend of electric vehicle (EV) adoption, Axis Bank is looking to finance dealerships as well as retail buyers of these vehicles. Sumit Bali, group director and head of retail lending and payments at Axis Bank, said while the private lender has recently linked up with Tata Motors for financing electric vehicles, there are more in the offing. and the bank sees significant potential in this space. Edited excerpts:

What was the demand during this year’s holiday season?

Demand has been quite strong and for us the credit card industry is a good barometer of consumer confidence. Generally, we considered March to be the highest month on record for card spend, surpassed only during the holiday season. This year, June was better than March and thereafter too, trends were good in all categories of discretionary and non-discretionary spending. These include travel, hospitality, restaurants and multiplexes. Month over month spending is at an all-time high, giving you the impression that customer confidence is good. This is therefore also reflected in other products such as personal loans. Even the demand for business loans or loans to the self-employed segment has been pretty decent. We have not seen any change due to interest rate increases. Part of that is also pent-up demand. You spend money on discretionary items when you are confident enough about the future. People are willing to spend and bet on increased future income.

What is your view of the EV financing space right now and how does Axis want to approach it?

We seek to finance customers as well as dealers. The idea of ​​having such an exclusive partnership (with Tata Motors) was that this market will multiply rather than grow by 15-20% every year. Our feeling is that as more players come into this space, led by domestic manufacturers like Tata or Mahindra, the space will continue to grow. It also attracts new players from international markets. Loan rates are similar to conventional vehicles. Although the interest rate is similar, they have a price advantage because many states allow certain incentives for electric vehicles. We are keen to fund dealerships as we believe this will be an important catalyst to grow this industry. Dealerships would need working capital loans. Everything is in short supply right now, but hopefully once the chip situation is sorted out and inventory levels return to 30-45 day levels, we’ll see demand for working capital for the electric vehicles. We are also in talks with other manufacturers. The entire EV space will see plenty of action. We believe this is an important segment for the future and we want to be invested in it from the start.

How do co-branded credit cards work?

In the area of ​​credit cards, all the partnerships we had are developing quite well and are good engines for the growth of organic card issuance. The Flipkart map is growing at a good pace and we have partnerships that we have just started and will start to show results. Currently, a third of our issuance is co-branded cards and spending on these is slightly better than regular credit cards.

Do you see a change in demand for home loans after rate hikes?

The demand for regular home loans is quite strong. During covid the prices had crashed due to lack of demand. Since then, we have seen a slight increase in builder prices, which is a sign of confidence that at this price, inventory is moving. We haven’t seen any impact on demand in the traditional mortgage segment and that’s what’s driving the growth. Over the past three months, we’ve been pleasantly surprised by the kind of spending we’re seeing. Other retail lending segments also performed well.

Is there more focus on rural areas now?

In the rural segment as a whole, the bank is quite optimistic and that’s why there is a higher level resource that takes care of it. They’re building partnerships, distribution, and improving the breadth and depth of it there. We will be distributing assets as well as liability products and this continues to be a priority area of ​​the bank and it is a strategy in place.

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