T M Bhasin, the newly appointed chairman and managing director of Chennai-based Indian Bank, has been busy in visiting its offices in different regions and reviewing performance. In an interview with Vrishti Beniwal, he shares his plans. Edited excerpts:
What kind of business growth are you looking at?
As on March 31, 2010, the bank crossed Rs 1,51,000 crore of business, of which global business was Rs 6,200 crore. We are planning to take the Indian business to Rs 1,75,000 crore and the global business to Rs 8,000 crore. So, we will reach Rs 1,83,000 crore by the end of the year.
What are your expansion plans?
We have 1,756 branches today. We are planning to open 180 branches in 2010-11 and 200-220 branches in 2011-12. Branch expansion will cover areas where we were deficient earlier, as in the north and the west. We will also expand in the southern and eastern parts, where linkages are required for forward and backward integration of our businesses.
How much growth are you expecting in advances and deposits?
We have recorded two per cent growth over the industry in deposits as well as advances. We hope to grow on the same pattern and our growth will be better than the industry this year, too.
What will be your focus?
We will cater to the agriculture sector and agro-based products. We will also go for MSMEs (medium, small & micro enterprises), retail and housing. We want to cater to more people, so that our risk is diversified. Today our gross NPA (non-performing assets) is 0.8 per cent (of all assets) and net NPA is 0.16 per cent. We have told our branch managers and circle heads to contain further slippages and recover money from the accounts which have gone into the NPA category.
What are the plans for ramping up IT (information technology) infrastructure?
We have about 1,000 ATMs. We will add 200 ATMs this year and the same number next year. The focus of the bank now is to woo younger customers. They look forward to alternate delivery channels. We have thought of online grievance redressal channels, so that the customer can reach us through our website. For most retail loans, like housing and education, we will accept applications online.
Would you expand outside India?
We have a branch in Singapore. We have a presence in Colombo but there was some problem due to LTTE operations. Now everything has been settled and we will expand our footprint in other centres of Sri Lanka and Maldives.
How much capital would you need to support these plans?
We have a capital adequacy ratio of 13.15 per cent by Basel-I (norms) and 13.75 per cent by Basel-II. My tier-I is already 8 per cent. We have tier-II headroom and there is no immediate concern. We will think of bringing a follow-on public issue in the time to come.
The average age of your staff is 49 years and they spend little time on acquiring new business. Is that a concern?
We will have to induct more staff. We can go to the campuses and recruit trained engineers and trained MBAs. In 2010-11, we would like to spend 20 per cent of the time on marketing, if it is 10 per cent today. We would like to make it 30 per cent in 2011-12.
Is consolidation on your mind?
The need is inclusive growth. Consolidation is not the priority.
How do you see interest rates moving?
Our prime lending rate is 11.5 per cent. Our asset liability committee is of the view that for the next 30 days, we should not think of increasing rates. We will wait for the annual monetary statement and based on the projections made by the Reserve Bank, we will decide our course.
