You have launched a Version 2.0 growth plan
In Version 2.0 we aim to become the Professionals Bank of India and to grow the balance sheet to Rs1,50,000 crore with advances at Rs 1 lakh crore and deposits of Rs 1,25,000 crore by March 2015. Moreover, on the cards is a pan-India branch network of 750 and a workforce of 12,000.
By March 2015 we would migrate from a medium-sized bank to a large bank. We would like to scale up our branch banking business which includes the SME piece, micro enterprises, consumer banking and wealth management and take it to about 60% of the loan book from 5% currently.
The remaining 40% would be split between large and mid corporates. We also want to ensure that our borrowings from the wholesale market would be down to 7% from the current 10%.
When will you be a full-service retail bank
We will launch retail assets without a credit card offering in March 2012 with a thrust on growing liabilities. We will have marketing tie-ups with other banks to provide various loan products rather than manufacture products.
Are there any plans to raise fresh capital
We will raise funds to the tune of $500 million through an American depository receipt (issue) by the end of next year. We are keen on an overseas listing. In 2011-12 our priority would be to set up branches in Singapore and the Dubai International Finance Centre.
What is your exposure to the MFI sector and are you open to restructuring these loans
Our advances to the MFIs, including pool buyouts, are at 0.97% of total advances, across 15 borrowers. To the Andhra Pradesh MFIs we have an exposure of about Rs 60 crore.
I am of the view that if the restructuring leads to economic value preservation we should do it.
The RBI is in the process of issuing new bank licences. What does this mean for medium sized banks like yours
New bank licences would create dissonance. At present, there would be around 15 banks in the country that need to be reinvigorated since their brands are underutilised. In the next four years we should look at beefing up their capital.
It would take about two years at least for the RBI to issue licences and it would be some time before they start operations. Competition is good.
You have built a greenfield bank.
Would you consider existing your investment
As and when the bank raises fresh capital, there would be dilution in my holding. I am not selling my stake. Till we do not build a world-class institution we would not be ready to amalgamate or be ready for a sale.
Did the global crisis throw up greater challenges for you considering you were in growth mode
We began operations in 2004 and it has been a dream run since then with the bank raising funds from private equity players, an IPO and a private placement.
The global crisis was a shock of sorts and we focused on improving our risk management, liquidity management, cost management systems as also reputation risk. We implemented strong human resources practices to ensure that our management had the tenacity to handle these risks.
As such, the bank has the best performance in second half of financial year 2010, which was reflected in our sustained revenues, margins and costs. As a consequence of those three years between 2008 and 2010, we are now a leaner, more efficient and agile organisation.
What steps did you take to manage the various risk
We began diversifying our liabilities base and stepped up provisioning to ensure that we had enough of a buffer on account of good profits.
We brought in about 175 management-cadre professionals through lateral recruitments from banks and the services sector.
To manage costs, we renegotiated vendor arrangements and also flattened the organisation.