Delhi-based Punjab and Sind Bank is the only public sector bank not listed yet. The bank?s chairman and managing director GS Vedi speaks to FE?s Kumud Das about the banks plans, such as going public. Excerpts:

How do you see your performance in 2009-10?

Last fiscal our performance was remarkable. Despite sluggishness in credit pick-up, we were able to achieve a growth of more than 30% in credit and 38% in deposits, much beyond the 16% of credit growth projections by the Reserve bank of India (RBI). Our net interest margin (NIM) was at 2.6% as on December, 2009. We hope it will be at 2.75% for 2009-10. Demand was not much during the first half. But, in the busy season (second half of the year), credit started building up. December onwards, we saw demand coming from sectors like SME, infrastructure, agriculture and retail. As far as the quality of assets is concerned, it is one of the best in the industry at my bank. While gross NPA stood at 0.85% as on December 31, 2009, net NPA was at 0.37%. We hope that the gross NPA will come down to 0.7% and the net NPA will hover around 0.32% for the entire year 2009-10. All the portfolios are doing well. By and large, all sectors are doing well. Our projection is that we will be able to achieve 20% growth in our net profit for the year 2009-10. We have achieved the net profit of Rs 437 crore in 2008-09, which shows a growth of 14% against the net profit achieved by us during 2007-08. The profit will be remarkable as there has been an increase in recovery of NPA accounts and overall increase in the interest income. Our total business is likely to touch Rs 81,000 crore for 2009-10. However, we are set to cross the Rs 1 lakh crore-mark by March, 2011. As we are the only state-owned-bank left to go for IPO, we are quite bullish on it. Since our balance sheet is very strong, the forthcoming IPO will give us a good opportunity to those investors who couldn?t invest earlier.

When will you tap the market ?

After I took over in August 2009, we had planned to go for an initial public offering (IPO). Accordingly, we made a proposal to offer four crore of additional shares for the raising of capital by way of IPO. We are likely to raise Rs 450-500 crore through the IPO which would hit the market in June. We?ll be filing the Red Herring prospectus for this by the first week of May and seek approval from Sebi.

What will be the impact on your bank after giving interest, calculated on a daily basis, to savings account holders?

It will benefit the bank?s account holders. But for the bank, the cost of funds would go up by 15-20 basis points under this new system which was put in place from April 1. As of now, we will look at our new guidelines. In case the cost is within reasonable limit, the bank will absorb the burden by its own.

What are your hiring plans?

We are in the process of recruiting more than 800 people, including 250 clerks during the current fiscal. Out of these, 500 will be officers and 65 would be specialists like chartered accountants, master of business administration. Total staff strength of the bank at present stands at 8,000. We are planning to open 20 new branches during the current fiscal.

Have you started working on the base rate?

Though it is going to help the banking industry, there are quite a few things that are to be looked into. In my bank?s case, the base rate is likely to be in the range of 8-8.25%.

What are the bank?s future plans?

We have syndication exercise, an exercise where my bank takes the lead to meet the corporates? requirements. It has given us a new opportunity to increase our non-interest income. Also, we will venture in gold trading.