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.

By 2013, our plan is to have a total business of Rs 75,000 crore with Rs 42,000 crore of deposits and Rs 33,000 of advances. We are also targeting to touch the level of 750 branches and 750 ATMs by that time. This year, the total business level of the bank should reach Rs 36,000 crore with Rs 22,000 crore of deposits and Rs 14,000 crore of advances.

Are you planning to introduce any new product or service ?

We recently launched the Mahila savings bank account which comes in two variants. As per the product, the account can be opened with a minimum balance of Rs 1000 along with a recurring deposit of a minimum Rs 100 per month for 12 installments.

The other variant which is Mahila Plus savings bank account can be opened with Rs 25,000 as minimum balance and monthly Rs 1,000 in recurring deposit. The bank is also planning to offer online trading services.

Is global expansion on cards?

Unless the banking sector is opened up it is very difficult to expand overseas. However, right now, we are managing exchange companies in Dubai, Sharjah and Ras-al-Khaimah. The advantage of operating an exchange company is that the ownership is with an Arab and the capital is his. We do not have any investment and we get commission on any remittance that is done.

What are you recruitment plans for the year?

The bank has been bringing down the average age of employees. From 49 years, we have now brought it down to 41 years and our plan is to reduce it further to 35 years in three years time. Every year, the bank recruits 500 people. This year, already we have hired 500 people and we will start the process of recruitment for the next year very soon.

Right now our staff strength is 5,000 people and it will go up to 7,500 people by 2013.