PwC will also advise on management information system, business restructuring, human resource management and development, risk management practices and information technology related issues, the banks managing director and chief executive officer RM Nayak, told FE.
Mr Nayak added that the report is expected to be ready by next month and will be put up before the board of directors for discussions.
The major issues of concern for the bank are: higher cost of deposits, low proportion of low-cost (savings and current account) deposits, higher level of non-performing assets (NPAs) and its regional outlook. The bank plans a major expansion plan and has obtained the Reserve Bank of Indias nod to open 18 new branches in eight states during the current fiscal. With this, the bank will have a network of 114 branches, spread across 10 states, from 96 as on March-end 2003. It will also expand its extension counters from 6 to 26 and automated teller machine (ATMs) to 41 from 23 during the year. The bank has identified retail business as its thrust area and will focus on housing finance, personal loans, car loans and consumer loans. Mr Nayak said banks in the retail banking space should have a customer-centric approach and Lord Krishna Bank will also stress upon marketing, customer service and client relationships. To improve customer service, the bank is taking steps to shift branches to better locations, to modernise the premises to offer better ambience, providing ATMs and high-tech banking at new locations, he added.
The bank will meet financial requirements for its expansion plan through retained earnings and it also expects higher retail and low-cost deposits. The bank will put a thrust on deposits from non-resident Indians and expects it to double to Rs 500 crore during the current fiscal. The bank will formulate customer specific deposits scheme for professionals and the younger generation. At this stage, we do not have any plan for an initial public offer to raise capital with comfortable capital adequacy ratio at 12.82 per cent, Mr Nayak said. Ruling out the possibility of acquisition of other regional players in the near future, he said: The bank will grow organically and as of now, we do not have any plans to acquire a bank.
The bank posted a net profit of Rs 23.05 crore for the fiscal 2002-03, with a rise of 16.95 per cent over Rs 19.71 crore in the preceding fiscal. Net NPAs were at 6.33 per cent as on end-March 2002 (9.85 per cent). The bank expects net-NPAs at below two per cent by end-March 2004 through massive efforts on recovery and preventing slippages.