Axis Bank’s managing director and CEO Amitabh Chaudhry has said that credit demand is coming from data centres, small businesses and gold loans.

The country’s third-largest private bank expects its credit growth to be higher by 300 basis points than the industry average in FY27 on strong corporate and retail demand.

"The headline growth is coming from three places: large corporates, non-bank lenders and gold loans," Chaudhry told Reuters in an interview.

Credit is growing at more than 15% ⁠even excluding these segments, suggesting broad-based demand, he added.

The Reserve Bank of India’s special swap window to attract foreign currency non-resident (Bank), or FCNR(B), deposits is likely to further boost credit growth in the banking sector.

Data centres, renewable energy, manufacturing and urbanisation are driving corporate credit demand, while gold loans and borrowers from smaller cities are fuelling retail growth, Chaudhry told Reuters.

Stating that data-centre lending is not a “jackpot” and requires underwriting discipline, Chaudhry noted that Axis Bank is selectively expanding in this sector, focusing on developers with strong equity backing, technical expertise and long-term take-or-pay contracts. Such contracts, where the supplier agrees a minimum quantity of goods that a buyer has to purchase every year, are typically agreed for long, extensive projects.

"It is seen as ‌a huge opportunity ⁠and a lot of players have entered it," he said. "It might not be such an easy place to play," Reuters quoted Chaudhry as saying.

Among retail segments, loans against gold surged 94% year-on-year in June.

The gold-linked demand did not signal economic stress, with borrowers instead taking advantage of higher gold prices and lower rates than those available under unsecured personal loans.

"Earlier, people would use gold to borrow only in extreme circumstances. Now they see it as a very legitimate way to walk in and borrow," Chaudhry told Reuters.

Chaudhry expects the bank's net interest margin — a key measure of profitability — will bottom out at close to current levels of 3.5%. The flood of dollar deposits, though, may bring down margins temporarily until the money is deployed, the news agency quoted him as saying.

Axis Bank is preparing to list Axis Max Life Insurance and Axis Finance.

The private lender is evaluating an internal restructuring involving Max Financial, its joint venture partner in Axis Max Life Insurance, after a change in regulations allowed non-insurance and insurance companies to merge, Chaudhry told the news agency.

The move could potentially result in the life ⁠insurer being listed within 12 to 18 months.

Axis Finance, which has more than Rs 500 billion in assets, is likely to list after its assets reach Rs 1 trillion, the level at which it would be required to do so under the RBI rules, Reuters quoted Chaudhry as saying.

At the firm's current pace of growth, that could happen within the next couple of years, he added.