Mumbai: The bad loans have topped for the India unit of Barclays Bank, as the bank has shift its focus to affluent customers from the mass market, a senior official has said.

"On consumer and retail portfolio bad loans have definitely peaked and it is significantly lower than what was there," said Tejinder Singh Nalwa, Consumer Risk and Collections Director, Emerging Markets, Asia told Dow Jones Newswires in an interview.

The bank, which completes three years of Indian operations this month, witnessed net bad loans surge to 6.37 percent of total loans at end-September as it focused on the mass market, reports The Wall Street Journal.

Bad loans rose to 4.59 percent of total advances in March 2009 from 0.42 percent a year earlier. Huge provisioning for these loans weighed on the unit's net profit and confined it to Rs. 301 million ($6.39 million) for the fiscal year ended March 31, 2009.

At the end of August, retail was 50 percent of the total loan book of the India unit, credit cards comprised five percent and the remaining 45 percent was commercial lending. Most foreign banks in India took rapid expansion through credit card and consumer loans to establish their footprint.

As the global credit condition worsened after the collapse of Lehman Brothers, the retail portfolio came under stress due to job losses and salary cuts.

"I think we have learnt from the past and we have identified a segment that we clearly do want to be in--which is the mass affluent segment," said Nalwa.

According to Nalwa, the bank aims to "triple" its affluent customer base over the next three years, but denied providing specific figures. "We are not going to go for the volumes, but pick up the niche and do the right segment," he said.

On an overall bank level, bad loans will take time to fall down; the new retail business has almost "negligible" bad assets. However, the bank will not sell any of the assets. "We are trying to recover loans ourselves. Our recovery rates have doubled," said Nalwa.

The emerging markets including India, contribute about 9-10 percent to the global retail and commercial banking, or GRCB, division of Barclays Bank. The bank has six branches in India, with the seventh opening later this month in Hyderabad.

The bank has invested more than 240 million pounds over the past two years, to set up and grow the GRCB business in India and is planning to infuse more capital, informed a bank spokesman.

The bank is also open to acquiring a product segment or a portfolio if the opportunity is right. "The growth will be organic, but if there is an opportunity that comes by on the way we would be more than happy to look at it," Nalwa said.