Karur Vysya Bank recently hogged the headlines as an acquisition target but this was strongly denied by the bank’s management. MD and CEO K Venkataraman speaks to Neelasri Barman about the focus areas for the bank. Edited excerpts:
At a time when banks are facing challenges to garner low-cost deposit, what are your strategies to improve Casa (current and savings account) ratio?
We are looking at large institutions for salary packages. We are also planning for cash management products. These products will include collection and payment module for companies that require collections at various points. For salary packages, we have tied up with Indian Coast Guard. We are also going to tie up with Indian Army for salary payments. We have a good network in the South and tying up with institutions will be helpful. Our Casa ratio is 22 per cent and we would like to reach 25 per cent.
How are you planning to improve the share of retail loan in your overall portfolio, which is at 11 per cent now?
How do you plan to boost your fee-based income?
Fee-based income is an area where we have to focus a little bit more. Last financial year, we made about 38 per cent growth in the fee-based income and we propose to push forward on this mainly through the bancassurance model, sale of credit cards etc.
Are you looking at any new area of business in 2013? You are currently into distribution of insurance and mutual funds. Any plans to have your own products?
We are not looking at getting into these areas ourselves. We will continue to do distribution of third-party products. We are not looking at any other new areas of business. That is because the bank is at a transformation stage. There are changes in the organisation structure and we are centralising the loan processing.
Some banks have raised their deposit rates in recent times as deposit mobilisation continues to be sluggish. Do you also plan to raise your deposit rates?
Right now, we do not have such plans because we are hoping for some softening of interest rates. We will wait for that and, if that does not happen, then we will take a call. If all other banks are raising it, then we will take a call later.
How has been the deposit growth of your bank? What are the business growth targets?
The deposit growth has been slightly sluggish in this fiscal so far. But the advances growth is also not very high. Due to that, there is no undue pressure on raising deposits as of now. If credit pickup is faster, then only there will be pressure on deposit growth. As far as our bank is concerned, we are not seeing pressure for raising deposits. For this fiscal, we plan to grow 25 per cent in credit and deposits. Our deposit growth is slightly sluggish, but credit growth is in line with our targets.