Chaudhry, who had announced while taking over as CEO his ambition of moving the needle in Axis Bank's position, says "if we create the right platforms, keep adding and building on it over a period of time, we can get there"
Amitabh Chaudhry, MD and CEO, Axis Bank. Image: Mexy Xavier
Amitabh Chaudhry, Axis Bank’s managing director and CEO, acknowledges that there is a gap between the second and the first (largest) bank. In terms of assets, ICICI Bank, the second largest, is 40 percent larger than Axis. Creating the right platforms, and adding and building on them for a period of time could help Axis rise up, but no one knows how long that might take. In the meantime, Chaudhry is focussed on becoming the second and the first in certain identified businesses. Edited excerpts:
Q. The external geopolitical concerns and the domestic economic problems linked to poor consumption and weak private capex persist. What is the on-ground scenario?
The macroeconomic factors, geopolitical factors are in turmoil, and we see mixed signals. The first half (H1FY25) for India was not very good. The GDP print was lower than expected, private capex was not picking up, with lower-than-expected credit growth and core inflation still above 4 percent. The state and central government spending was weak. Things do look tough, but our view is that all the answers to get India back on the growth path lie within India. Our debt to GDP is one of the lowest, we have managed the fiscal deficit well and the Reserve Bank of India’s (RBI) message has been to bring durable liquidity into the system.
Also read: Amitabh Chaudhry's game plan: Can Axis bank beat HDFC Bank, ICICI Bank?
The second half of FY25 has been better: High frequency data is starting to pick up. Private capex remains impacted because of the volatility around the world and tariff concerns. In our business banking vertical Evolve (MSME platform), there is huge optimism of how well they can do business. MSMEs are scaling fast and wanting to be global. Our worry is that unless durable liquidity is provided for a reasonable time and durable surplus liquidity exists for a period of time, you will not see a change in the lending rate or translate into improving the cost of deposits. Cost of borrowing has to come down, it will happen only when the market starts believing that liquidity is here to stay.
(This story appears in the 14 May, 2025 issue of Forbes India. To visit our Archives, click here.)