'Business to rise three-fold by 2013'

Q&A: V A Joseph

VA Joseph, chairman and CEO of South Indian Bank, was in Kolkata to inaugurate the regional office catering to the country's eastern region. In a conversation with Niladri Bhattacharya, he shared his vision for the bank and insights on the sector as a whole.

How do you see your bank in the next five years?

We have formulated a plan for the next five years and this is awaiting the board's approval. All I can say is that we would increase our business three-fold by March 2013, from the current level of Rs 24,500 crore.

We also plan to add 250 branches during that period, taking our total branch strength to 750, and increase our ATM network to 500 from the current 202.

What is your focus area?

We would emphasise on having a countrywide network. For example, we would have 30 branches in the East in three years time. Our long-term corporate objective is to emerge as the most preferred bank in the country, with core competence in fostering relationship banking, garnering core deposit with accent on costs, creating high-yielding quality assets through focused marketing, qualitative appraisal and effective monitoring.

What about overseas plans?

Overseas operations are important as nearly 25 per cent of our deposits come from NRIs. We already have two exchange houses in the Gulf, one each at Sharjah and Dubai. We have applied to the regulator for a representative office at Sharjah. With the banking sector opening up in 2009, we may get opportunities to open branches overseas.

Will you raise further capital to support the proposed expansion plans?

Our capital adequacy ratio is 14.92 and hence we have no capital-raising plans. We have enough Tier II capital which could be utilised whenever necessary.

How do you see the interest rate scenario panning out?

I personally believe that the interest rates would soften this year. This is mainly because the credit off-take has come down and there is sufficient liquidity in the market.

How do you envisage the role of the Reserve Bank of India?

RBI kept the interest rates unchanged in the last credit policy as it wanted to keep a close watch on inflation. It may take action once the situation stabilises.

Are you planning to reduce the prime lending rates (PLR)?

Yes, we are thinking of reducing the PLR. But the final call would be taken at the Alco meet, which is due shortly.

What will be the key for survival post-2009, when the banking sector is opened up?

I believe that customer service is the key to survival. Quality and timely service would make the ultimate difference as this is what the customers seek.

Technology is also emerging as a key driver of business in the banking and financial services industry. Core banking or centralised banking has become important as it provides connectivity between branches, besides providing a large number of value-added products.

Are you open to acquisition?

Yes, we are open to such a possibility. We constituted a committee some time back to explore opportunities, but there hasn't been any good proposal so far. Actually we would like to take over a smaller bank, provided there is technological synergy.

How will the banking sector perform in the coming year?

There is no reason why the banking sector should not perform well. The excellent growth should continue, given the improved work culture and environment.