Loans for motorcycles are a thing of the past at India's ICICI Bank. So are credit cards for anyone other than existing customers.
India's second-biggest bank, whose aggressive growth made it an investor favourite before it was nearly brought to its knees during the financial crisis, has even become picky about lending to power and infrastructure projects, a core market.
With its once-sickly loan portfolio on the mend after several years of consolidation that saw it lose market share, ICICI is looking once again to grow faster than the industry - though more cautiously this time around.
"Growth for the sake of growth can get into asset quality problems," said N.S. Kannan, executive director and chief financial officer at India's largest private sector bank, with assets of $93 billion.
ICICI aims to grow its domestic loans by around a fifth this fiscal year, led by consumer loans and working capital, and will be especially cautious with project finance, Kannan said. In the last fiscal year, ICICI pared back overall loan growth to 17 from its initial target of 20 percent.
"For retail unsecured loans we have clearly tightened the filters. We are very careful in project finance and in identifying the projects that are worthy of financing," said Kannan, who assumed his role in 2009 when Chanda Kochhar was promoted to CEO.
Eric Mookherjee, fund manager at Shanti Gestion in Paris, said ICICI had little choice but to be much more cautious, which could hinder growth if India's flagging economy recovers from its most sluggish pace in nearly a decade.
"There's a lot of gloom about the Indian economy and if it turns out that India is not able to recover then ICICI is in good stead, but if the economy recovers they would have lost a little bit of leverage," said Mookherjee, who recently sold his ICICI stake and will re-enter at lower levels.
So far this year, ICICI shares are up more than a third - outpacing 28 percent growth in bank stocks - though they are still down nearly a quarter since the start of 2008, lagging rival HDFC Bank, India's No.2 private sector lender, which is up nearly 75 percent, and the banking index's 6 percent gain. Its current market value is close to $20 billion.
Still, ICICI's price-to-book ratio of 1.8 is the lowest among India's four largest private sector banks, and pales next to HDFC's 4.7. Of 48 analysts covering ICICI, 42 rate it a buy.
Kannan acknowledged it took time for some investors to come around to its less-aggressive mindset.
"Initially, one of the pushbacks we used to get from investors was that your DNA is a growth-oriented DNA: So, will you be able to deliver on the consolidation agenda?"
ICICI still bears the scars of the financial crisis, when bad loans surpassed 5 percent of total assets in the year to March 2010. It has pared that to about 3.5 percent, still far above HDFC Bank's, which are just under 1 percent.
After Lehman's 2008 collapse, worries about ICICI's overseas exposure prompted a near-50 percent one-month drop in its shares and led some depositors to queue at branches to withdraw cash, forcing it to issue text messages assuring that it was healthy and prompting the central bank to declare it well-capitalised.
In 2007, consumer lending accounted for more than 65 percent of ICICI's assets; it is almost half that now, although it wants to grow that to 35-40 percent over the next couple of years.
ICICI was involved in some of India's most notorious troubled corporate loans, including to Kingfisher Airlines, Air India AIN.UL and GTL Infrastructure, but has been more hard-nosed in restructuring terms than some of the state banks that lent alongside it.
It recently sold its remaining exposure to embattled Kingfisher at face value, although it took a hit after converting part of its debt to equity. Other Kingfisher creditors, mostly state banks, are still on the hook.
"You should give us some credit for our ability to resolve," Kannan said from his 10th-floor office in the sprawling Bandra-Kurla office park in suburban Mumbai. "Kingfisher, for example, we could resolve that asset by selling it off. In taking steps like talking to promoters (controlling shareholders), talking to lenders' consortium and protecting our interests, I think we have been above the curve."
ICICI expects asset quality to improve. Its restructured loans more than doubled last year to 47 billion rupees, but it does not expect to restructure much more.
Kannan also expects the overall group's return on equity - a measure of profitability - to grow a couple of percentage points to 15 percent by next March. Its return on equity is the lowest of India's top five banks, including Axis Bank and HDFC, which have ROEs of 20.3 and 18.8 percent, respectively.
ICICI surprised investors two quarters running with robust profits and better asset quality. Its latest quarterly growth was its strongest in over a year.
"If we want, we can always grow faster, but growth should be subject to risk and profitability. That's quite embedded now," Kannan said.