Even as some large and mid-sized private sector lenders are shying away from growing their large ticket corporate loan book due to lower yields, public sector major Canara Bank has sanctioned `60,000 crore of corporate loans in the last four months and already disbursed around Rs 20,000-25,000 crore of such loans, the bank’s MD & CEO K Satyanarayana Raju tells Piyush Shukla in an interview. Edited excerpts:
Which sectors are showing higher credit growth?
We are seeing a good growth in the retail, agriculture and micro, small and medium enterprises (RAM) segment as well as vehicle loans, housing loans and even in personal loans for salaried class. In MSMEs, we have come out with 15 area-based products and got good traction there. In the agriculture sector, though sowing season has not commenced in first quarter, we saw good traction in food processing, agriculture infrastructure and to some extent self-help groups. In corporates, growth is continuing in infrastructure, green energy and in the data centre creation also we have given some sanctions.
Some banks say there is a mispricing of risk happening in large ticket corporate loans. What is your view?
Generally, when you aim for 20-25% growth then you may have to compromise on pricing. When we want to grow (corporate loan) only at par with our RAM loan growth, that is approximately at 13%, then we have so much options to pick ticket size. Majorly, I feel fast decision gets you more traction (from corporates).
What is the quantum of corporate deals in pipeline for this fiscal?
In the last four months we have sanctioned more than `60,000 crore of corporate loans. Approximately, `20,000-25,000 crore might have been disbursed. Every fortnight our board is disposing the corporate proposals and every time we see not less than Rs 10,000 crore of sanctions.
How do you plan to improve your CASA ratio from 33% as of June-end?
Of the total CASA of Rs 3.60 trillion, current account forms Rs 40,000 crore and remaining Rs 3.20 trillion is from savings bank accounts. Thus, we aimed for more initiatives and products for savings bank customers. We bifurcated our target customers into two types, one is who wish to deal with the branch and other type of customers do not wish to visit branch.
The first product is for salaried class and younger generations who do not wish to visit the branch. We have introduced premium pay roll package and that has attracted younger generation and employees between 25 years and 35 years of age. The existing base of Canara Bank salaried class is around 700,000 and in the first 3.5 months of launch, so far we have already onboarded 310,000 people. The second one we introduced is online account opening through video KYC, third one is tap-banking, and we also are coming out with smart branch type of counters. These will act as account opening kiosks and cash recycling points.
What is expected NIM trajectory for FY24?
Undoubtedly interest expense is a challenge for all banks, including Canara Bank. But for raising deposits we do not face any problem as existing rates are competitive and so far in four months we have been able to garner net incremental growth in retail term deposit to the tune of `8,000 crore. So, I do not forecast that we have to increase my rate of interest on retail term deposit beyond existing ones. At this moment we have 3-4 schemes where we are offering interest rates between 7.25-7.75% on an average to senior citizens and others. That will continue in Q2FY24 also because we still do not see flexibility in liquidity in system. We have come out with recurring deposit (RD) campaign also where we are aiming `1,000 crore in next two months on the top of existing base of around `3,800 crore.
Thus, my interest expenses at the present level may continue, and naturally NIM we could manage around 3%.
On digital side, are you live on UPI Lite feature?
We are ready with UPI Lite. NPCI has to give a go-ahead, we are waiting for that. Any moment that can come but from our side we are ready.
Your bank was among the first to go live on linking UPI with RuPay credit card. What is the traction seen so far?
We are not seeing the transaction volumes but from our active credit card base of 258,000, we have seen approximately 10% of people opting for that.
Have you enabled CBDC payments interoperability with UPI QR code?
We are the first bank to go for interoperability. In terms of onboarding merchants and users also, we are number one or number two bank. We have onboarded over 7,000 merchants and are reaching 8,000 merchants. Customers base is also touching almost 200,000. Valuewise, things have to still pick up. We are also publicising at our level and have distributed to all the 7,000 merchants stickers that say they accept CBDC payment. But once the interoperability is enabled by all the banks, then more traction will happen.