Tamil Nadu?s private sector banks, unlike their peers in other states, were always seen as old generation lenders. They believed in the conventional way of doing things. They were conservative and prudent, resisting the urge to go in for radical reforms in a big way. But not any more. With banking horizons expanding all around them, old-generation banks want to sport a new look. They are finally daring to be different and moving forward.
Taking a leaf out of the Mandarin text, a host of home-grown old generation private sector lenders hailing from Tamil Nadu have started going places. Many of them are going for an image change, lock, stock and barrel. Says Chirantan Chandran, principal partner, client leadership, Mindshare, a company specialising in brand makeovers, ?It was logical and natural for these home-grown banks, which have tasted success in their respective territories, to venture into national markets. The success in the regional markets has given them the confidence and encouragement to venture out nationally.?
Eager to shed its southern tag and to gain a wider geographical reach, Lakshmi Vilas Bank (LVB) has been aggressive in its expansion plans. It intends to open more branches in northern states this year. Says PR Somasundaram, managing director and CEO, LVB, ?We will be deploying separate resources to oversee the setting up of our branch networks in northern states in a big way.? He says the bank currently has a total of 36 branches outside the south and, going forward, it intends to multiply the numbers.
When small private sector banks and cooperative banks elsewhere in the country scrambled to merge with public sector banks at the start of 2000, Tamil Nadu?s banks stood their ground. A case in point would be Pune-based Shree Suvarna Sahakari Ltd, which merged with Indian Overseas Bank. Even in neighbouring Kerala, the oldest private bank?Nedungadi Bank?merged with Punjab National Bank in 2003, again followed by yet another private bank?Lord Krishna Bank?which eventually merged with HDFC.
Karur Vysya Bank (KVB), which recently took a call on Boston Consulting Group?s advice on organisational rejig, has increased the foreign holding cap to 35% from the existing 24%. It is now eyeing more cities across the country to enhance its footprint. Says PT Kuppuswamy, managing director and CEO, KVB, ?We have taken a conscious decision to go pan-India in order to achieve better connectivity, which may lead to increased business for the bank. The bank is now concentrating on the northern region and is in the process of opening branches and ATMs in places such as Delhi, Rajasthan and Gujarat.?
According to Chirantan Chandran, the banks that are strong players in the south will have to adapt to newer market realities in terms of new business philosophies and market strategies. ?The corporate identity of an organisation is a reflection of its business philosophy, of the spirit of the organisation, and what they stand for. Hence with changes of geographies, there could be a need to re-examine the corporate identity,? he says.
Yet another private bank from Tamil Nadu, the Tuticorin-based Tamilnad Mercantile Bank (TMB) is also leaving no stones unturned to ensure a space in the national banking landscape. Following in the footsteps of big brother, State Bank of India, it has introduced the TMB Royal SB Account, targeted at high net worth individuals, fixing the minimum balance at Rs 50,000. Says A K Jagannathan, managing director and CEO, ?With the launch of this scheme, TMB has become a financial super market having schemes for students as well as rich individuals. The bank is in the process of scaling up its branch network in a major way in order to achieve its Vision 2013, which envisages Rs 50,000 crore business, Rs 500 crore net profit, with its branches touching 500 mark. By December, we are planning to open another 20 branches and 200 ATMs,? he says. TMB is also said to be nurturing global ambitions and is mulling opening overseas branches soon.