India's largest private sector bank ICICI Bank, which increased its lending rates by half a per cent today, sees no liquidity crunch in the coming months and its credit growth will remain buoyant in spite of interest rates going up.

Interest rate adjustments, said ICICI Bank MD & CEO, K. V. Kamath, is purely addressing risks which could arise consequent to global events. ‘‘Unless we have an affordability issue, demand should not be impacted because it’s not consequent to anything domestic. The economy is doing well, people are earning well, compensation levels are increasing in a fair manner,’’ said he. ‘‘I don’t see any sign that interest rate will be a constraint,’’ he added.

‘‘So far we have not seen a slowdown at all. We have to look at the interest scenario in a global context and I am not seeing a liquidity constraint. If there was a liquidity constraint, then I would have said that clearly the bias is upwards,’’ he said.

On retail loans, Kamath said his asset book remains healthy and the interest rate hike will not affect the demand for home loans. ‘‘Consumer credit asset quality has remained good. No movements in that at all, so there is no issue. My historical book has clearly corrected. As far as we are concerned the trend is holding in terms of improvement in asset quality,’’ he said.

The bank’s retail consumer lending has been growing at an annual rate of 60 %.

Kamath said as most of the corporates are cash surplus, the demand for funds from India Inc is not very high. ‘‘It’s interesting part of our business. Never before in our history we have so much of corporate deposits sitting in our system. If you look at it, there are substantial growth plans and that is being financed through some judicial debt raising through ECB and FCCB and they (corporates) are not coming to the domestic market, except for their working capital needs. So the corporate is not a big borrower in our experience,’’ he added.

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