What is your take on the current economic scenario
I would also say that the Indian economy is slowly reviving. Many of the sectors, especially IT and textile, got affected because of lack of export demand. There are two to three options available for us. The first and foremost being to explore new markets. For example, all along our textile industry has been focussing on the US and European markets. Now is the time to find out if we can export to China and Eastern countries. The other thing we need to do is develop the domestic market.
One important lesson that we have learnt from this downturn is that it is not advisable to be out and out an export-oriented economy. It is high time we encourage more local demand for goods and services.
Also, many of the services that our IT companies have been offering to foreign countries have not been made available to the Indian market so far. If the services and solutions are given to the Indian companies at affordable rates then their exposure to the export market would be curtailed. Some sectors have shown signs of revival. I expect the overall economy to shown visible signs of recovery in a year approximately. From the point of view of credit offtake, I can say that we are seeing some positive signs in the textile segment, real estate and automobile segment. For KVB, the credit growth in these two months alone has been to the extent of 5%-7% .
Are interest rates expected to reduce further
There is a possibility of reduction in interest rates to the tune of 50 bps. Infact, at KVB we have reduced our BPLR 2-3 times and will bring it down further in the coming days, depending on the RBI policies. But we cant go on on reducing our deposit rates, it should definitely be above or on par with the post office rates. It is only the senior citizens who put their money into the banks and a 25 bps or 50 bps difference in the rates makes a lot of difference to them.
How has been the credit offtake in the industry
From September 2008 to March 2009, which is considered to be the peak season there was not much of credit off take in the industry as a whole. However, from April onwards things have started looking up. Last year, for the whole of banking industry saw an average credit growth rate of about 15%-17% . This year we expect it to show an increase of 20%.
What are your plans for the bank in the current fiscal, in terms of business growth and network expansion
The bank is targeting an overall business of Rs 32,000 crore by the end of the current fiscal with deposits of Rs 18,500 crore and Rs 13,500 crore of advances. This should go up to Rs 50,000 crore within the next three years. During the year ended March 2009, the bank has crossed total business of Rs 25,000 crore. Now the bank has 314 branches and our plan is to expand the network to 400-450 branches within the next three years. All along we were being looked at as a south focused bank. Now we want to shed that image and want to be known as a south-based bank with a pan-India presence. In terms of ATM network, right now we have 325 ATMs, including both onsite and offsite locations. The idea is to add 35 more in the current year. Through our ATMs customers can pay college fees, too. KVB already has a tie-up with 8-10 colleges. Very soon we will be starting this facility for Annamalai University. As of now, we do not have any plans to raise funds.
KVB is still being looked at as a take over target
All I can say is that these are baseless rumours. KVB is not on block. However,there is no denial that other banks tried talking to us for a possible acquisition deal including Kotak Mahindra Bank but our promoters are not open to offloading of stake.