‘Government should bring down postal savings interest rate’

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: Thrissur-based South Indian Bank, an old generation private sector bank is today getting recognised as a bank for the new generation for its aggressive nature in adopting information technology as a tool to offer varied products and services. The bank has set ambitious target of achieving total business of Rs 75,000 crore by 2013 from the present level Rs 30,000 crore. Speaking to FE, VA Joseph, managing director and chief executive officer of the bank outlines the plan for the bank during the current fiscal, market position, overseas expansion etc. Excerpts:

What is your take on the interest rate scenario persisting in the country? When do you expect the market to recover?

Interest rate, as expected, has not come down. For instance, banks, say five years ago, used to offer housing loans at 7.5%-8%. But in the last two years, the rate of interest has gone up substantially and has not come back to the earlier levels.

The present crisis is the after effects of what happened in the US. The banking sector in the US miserably failed but Indian banks are very strong, much better than earlier years. So, unless a correction happens globally, we cannot expect growth in all quarters in India. Infact, in the last 2-3 months, we have seen some momentum in the market in certain segments.

What are you expectations from this year’s budget?

In the coming days, the interest rates on both deposits and advances are likely to come down. So, perhaps what the government can do is bring down the postal savings interest. In the present scenario, if the postal savings interest is reduced, banks would immediately follow suit and par down the deposit and advances rate.

What are your plans for the bank in the current fiscal in terms of total business, branch and ATM network expansion?

We are planning to increase our branch network to 575 branches by March 2010 from 543 branches in 24 states. We will be adding 11 branches in New Delhi. Besides, we are entering Himachal Pradesh and Jamshedpur.