Mangalore-based Corporation Bank is targeting a business of R2 lakh crore this year and hopes to grow 25% next year. Ramnath Pradeep, CMD, tells Shreya Roy how the bank plans to manage non-performing assets and balance global ambitions with financial inclusion.

How has the year been and how do you read the coming year?

We have a target of R2 lakh crore and we are not very far behind. In the next two years we should grow our loan book by 25% and deposits by 20-22%. Next year the total business growth will be around 25%.

How have interest rates movement impacted the bank?

This year has been challenging particularly after September when interest rates started rising. We were targeting a net interest margin of close to 3%, which may not be possible now. But we will achieve around 2.5%, which is higher than last year?s margin.

Liquidity is an issue, and we are not comfortable with the growth in deposits, particularly Casa. Though we have increased the number of Casa accounts, maintaining the balance has been a challenge. Earlier, our average was at least R25,000, which has come down. People are leaving smaller amounts in the savings account while the rest of the deposits are being converted into term deposits. We are now working on quality of deposits rather than on the quantity and this will be the focus.

The bank?s NPAs were up slightly in the December quarter…

We have been able to make a substantial recovery. We are displaying photographs of wilful defaulters on our websites and at our branches and this has shown results. We do not want to adopt coercive methods, but we have no sympathy for wilful defaulters.

We are committed to helping people repay, but wilful defaulters will not be dealt with casually. There was a delay on part of the bank in taking such steps, but now, our efforts are bearing good results. Reduction in NPA will be substantial this year.

What are your network expansion plans for the coming years?

We are planning to increase 200 branches every year till 2015. This year, we opened 106 branches on a single day and will add 200 branches in the coming financial year, which gives us a comfort level for mobilising Casa. These will be mostly in the tier II and III areas,where we see good business. For growth, we are focussing on states like Bihar, UP, Chattisgarh, which are growing very rapidly.

You have long been seen as a regional bank. Do you see a shift in the perception?

That is something that we are working on. While we have a pan India presence, which is going to expand, we also have international ambitions. We have approached RBI for a licence for our first overseas branch in Hong Kong. At present, we have two representative offices in Dubai and Hong Kong. We are also looking for opportunities in South Africa. Expansion outside of India is a clear focus area for us.

So, what is the human capital addition you are looking at?

At present, we have 13,000 plus employees and with the expansion and retirements we will have to hire close to 800-900 people each year. We are recruiting through campuses because we don?t have a training institution. We are trying to acquire land in Bangalore to set up our own institute. The allotment has been made, transactions are taking place. Once that is done, we will have our own state-of-the-art training institute.