The Hindu Business Line : `KVB Ninety - Techie' is new refrain

Having achieved 100 per cent branch networking, we have demonstrated that we are a match for any new-generation private sector banks, both in adoption of technology and core competence.

MR P.T. KUPPUSWAMY

Coimbatore , July 14

It is not just another coinage of a new slogan. Rather, it is a response to changing times from a banking institution in an era marked by technology-driven customer service, alongside prudent financial management.

`KVB Ninety - Techie' is the slogan from Karur Vysya Bank on its completing the 90th year of service in banking, a remarkable feat for an old-generation private sector bank. The new slogan, according to Mr P.T. Kuppuswamy, Chairman, KVB, is to symbolise the financial soundness and technology adoption of an institution built astutely for over nine decades.

Established in 1916 by Mr M.A. Venkatarama Chettiar and Mr Athi Krishna Chettiar to meet the credit needs of farmers, trade and businesses in the backdrop of World War I, KVB started with a capital base of Rs 1 lakh. Today, it is marching with a total business of Rs 13,000 crore (end-March 2006) and its own fund base of over Rs 871 crore.

The bank's financial soundness and administration prowess had led the RBI, in the mid-1960s, to rate KVB a strong candidate to take over four other banks. Excerpts from an interview with Mr Kuppuswamy:

Current trend in banking and KVB's placement

Though the banking industry had shown growth in 2005-06, it is not expected to sustain at the same levels on assets and liability sides this year. But KVB is confident of outperforming the industry's average growth of 15 per cent.

Future scenario for KVB

We have multi delivery channels; adapted ourselves to the technologically changing environment and enjoy a financially good track record - hence the new slogan `KVB Ninety-Techie'. KVB is poised to open 30 new branches (currently 242 branches) and these would be inter-connected under core banking solution. We have targeted achieving Rs 17,000 crore total business for 2006-07 (against Rs 13,000 crore in 2005-06) and have alreadyreached Rs 14,000 crore.

On the bank's non-performing assets

KVB's gross NPA was brought down to Rs 223.15 crore (3.91 per cent) from Rs 241.91 crore (5.10 per cent) as of end-March 2006.

Net NPA was brought down to Rs 44.83 crore from Rs 75.75 crore (from 1.66 per cent to 0.81 per cent). We are confident of bringing it down further this year.

Scope for smaller banks remaining competitive in the present high-tech age

Small banks have more manoeuvrability to adapt themselves to changing market conditions and customer demands.

Having achieved 100 per cent branch networking, we have demonstrated that we are a match for any new-generation private sector banks, both in adoption of technology and core competence.

Adoption of risk management and KVB

KVB is not looking at Basel-2 from the compliance angle but looks at it as a means to adapt ourselves to global standards and practices for risk management reflecting the bank's efficiency and perception of risk management. We are keen to get the RBI's nod for adopting at the earliest the IRB approach to credit risk management.

KVB's future thrust

Providing enhanced service at affordable price, leveraging technological competencies with pan-India coverage. Its profit earning and dividend payment has been consistent since inception (100 per cent dividend consecutively last three financial years).

Its net owned fund of Rs 871.63 crore consists of the ploughed back profits.

The bank had proposed an additional 20 per cent dividend this year, it being the 90th year celebration.

The bank is coming out with a 1:1 bonus issue and a rights issue of 2:1 (for every two shares held, one share will be allotted as rights share).

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