It will take a couple of quarter before Indian economy revives: D Sarkar, Union Bank of India

MUMBAI: The Indian economy, which grew at slower pace of 6.9%, will take at least a couple of quarters to revive, as business confidence level is still very low now, says D Sarkar, the new CMD of Union bank of India.

Speaking to ET soon after taking charge at the bank, Sarkar said that businessmen and industrialist will look at expansions and new businesses only in the second half when the economic environment is expected to improve.

"The reversal of the interest rate cycle may begin in the first quarter of this year if the Reserve Bank of India cut cash reserve ratio by 50 basis points," he said. As interest rates eases credit demand will also improve.

"We expected demand for loans to get better in the second half of this year." In 2011-12, credit growth for most government owned banks have been in the range of 15-17%, little lower than 18% projected by RBI.

He pointed out the sectors like steel, power and textile are facing stress and this is having a spill over effect on the infrastructure sector as well. Keeping this in mind, while addressing senior officials, Sarkar called for rigorous monitoring of loan accounts to ensure that that accounts do not slip into the bad loan category.