In less than two and a half months since taking charge as Managing Director & CEO of the Central Bank of India Bank of India, Kalyan Kumar has undertaken an extensive outreach programme across over 100 centres focused on retail, agriculture, and MSME (RAM) segments. In a conversation with Christina Titus and Mahesh Nayak, Kumar says corporate loan demand has also picked up, with a sanctioned pipeline of Rs 85,000 crore to Rs 1 lakh crore. Excerpts:
It has been a few months since you took charge at the Central Bank of India. What are the initiatives you have taken so far?
We organised credit outreach programmes across more than 100 centres for retail, agriculture, and MSME sectors in separate weeks, generating strong business leads and growth in these areas. While books remain dominant and preferred, we aim to balance them with retail, agriculture, and MSME segments. We have opened nearly 84,000–85,000 bank accounts through just one programme. Going forward, our primary focus will be on agriculture and MSMEs. We have identified active clusters and 250 branches each for agriculture and MSMEs, and developed cluster-specific products. In agriculture, our focus is mainly on self-help groups.
Kumar on GST cuts
With significant economic measures like the GST cut and other developments, how do you view the overall scenario?
The overall outlook appears optimistic due to GST rationalisation, rate cuts, and income tax changes that have increased disposable incomes. This is reflected in our retail credit, which has grown 20% year-on-year. We have seen robust demand for housing and vehicle loans. These policy actions have created good opportunities in the retail segment. Demand for corporate loans has also picked up, and we now have a pipeline of roughly Rs 85,000 crore to Rs 1 lakh crore.
Do you see this consumption trend sustaining even after the festive season?
Yes, without a doubt. This is a long-term trend. Corporate demand is rising with ample capex opportunities as the private sector invests, which in turn boosts retail demand. These are interlinked, so I don’t see a slowdown in the near future. I expect similar growth in the corporate loan book as well. There is a renewed opportunity in private capex. We are receiving strong proposals, signalling that private entities are venturing into new areas, creating more lending opportunities. I see significant prospects in sectors such as renewables, roads, transmission, and hospitality, among others.
Has the US tariff issue really affected your customers?
We have not seen any material impact or delinquency from the bank’s perspective. Many of our customers have diversified into other markets, effectively balancing out the impact of higher tariffs.
Kumar on December rate cut
How do you see the impact of the December rate cut on your margins?
The rate cut has had a marginal impact on our margins this quarter. However, in the March quarter, we expect a higher impact since about 60% of our loan book is repo-linked and benefits pass through immediately to customers. We are countering this by diversifying revenue through cash management services, non-fund businesses, and the sale of PSLCs (priority sector lending certificates) to offset any profitability impact.
What are your plans for branch expansion?
Our branch network is aligned with our business strategy. We plan to open more than 100 branches in FY26. It’s a continuous process — based on business requirements and the bank’s presence, we will continue expanding our network going forward.
Are you focusing on M&A financing, now permitted by the RBI? Do you see scope for the bank to play a role there?
M&A financing is not for book building; it requires specialised skills, which we are currently developing. This is an opportunity we don’t want to miss, but for now, it’s not our immediate priority.
How do you see the impact of the new ECL framework?
We expect an initial impact of roughly Rs 2,700–3,000 crore. I don’t foresee more than a 7–8 basis point hit on our margins. However, our balance sheet is strong enough to absorb and sustain this impact.
How do you see your partnership with Generali Central helping the bank’s growth?
It’s a strategic partnership with an insurance company. We expect robust traction in premium income. Generali can market their products through our network, and we can offer more options to our customers. With their innovative offerings, I’m confident they will support us in driving both premium growth and dividends.
How do you reimagine the Central Bank of India’s model in this digital era of intense competition and new-age banking?
The Central Bank of India has over 65% of its branches in rural and semi-urban areas, giving us a strong presence across Bharat to effectively serve India. Our new concept of an integrated MSME ecosystem — combining advisory services with financing — will be a game-changer. I believe this approach will help the bank play a vital role in strengthening employment, fostering industries, and supporting national growth.
What is your vision for the bank by 2030?
We are aligned with national priorities through digital innovations and customer-friendly products, becoming more tech-savvy and customer-centric while investing heavily in employee capability building and training. By 2030, we aim to achieve a strong market share across RAM, corporate, and CASA segments. We remain focused on slippage containment, asset quality, and profitability to deliver sustained value to stakeholders.
Is digital fraud a concern for you?
Digital fraud is a concern for everyone, and the Central Bank of India is no exception. We have implemented several measures, including Enterprise Fraud Risk Management (EFRM), to prevent such incidents. We have it under control, though occasional cases do occur as part of the process.