The Hindu Business Line : Andhra Bank to focus on low-cost deposits

, THE new Chairman and Managing Director of Andhra Bank, Mr K. Ramakrishnan, has chalked out a robust growth strategy for the bank aimed at securing a place among the league of mid-sized banks in a couple of years.

The strategy involves achieving a 30 per cent growth in key parameters that include the mobilisation of low-cost deposits and an increase in the corporate and retail credit off-take.

Talking to Business Line, Mr Ramakrishnan said, "The strong fundamentals of the bank are already being reflected in the stock price, which is currently hovering around Rs 100. Ours is probably the only public sector bank in the country whose stock price has shown ten times growth over the offer price of Rs 10 at par value."

Mr Ramakrishnan wants to take the bank to further heights. "We want to achieve around 30 per cent growth in low-cost deposits. We will be reducing our dependence on bulk deposits. We are planning to organise massive campaigns for low-cost deposits shortly. "

According to him, the bank cannot reward its borrowers in the form of attractive interest rates unless it aggressively enhances low-cost deposits. "Even in the credit growth strategy, the priority will be given to the retail credit portfolio."

Mr Ramakrishnan added, "Our priorities also include substantially augmenting the non-fund based income with the help of new revenue streams and by exploring new opportunities. "Apart from further reducing the gross and net non-performing assets (NPAs), we will also focus on technically written off assets so that they reflect directly on the profit and loss account. At the same time, we will also prevent slippages and upgrade the loan accounts by rehabilitations, restructuring and revivals."

The growth strategy entails a further expansion of the delivery channels' network. Apart from networking its branches through a core banking solution, Andhra Bank plans to set up another 400-500 automated teller machines (ATMs) during the current fiscal.

"The focus will be more on setting up of off-site ATMs so that we can reach the unbanked areas," he said.

The bank is set to launch alternate delivery channels that include Internet banking, phone banking and mobile banking. These delivery channels are currently being tested at a pilot stage. " We are also exploring collaborations and joint ventures for spreading wings overseas," Mr Ramakrishnan said.

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