The Hindu Business Line : Tier-I cities, towns getting more bank thrust

Coimbatore May 11 Chief executives of banks have of late started giving greater thrust to smaller towns and cities. The visit of the top official of at least four banks namely Bank of India, Bank of Baroda, Union Bank of India and now, Andhra Bank in quick succession, for a face-to-face interaction with both — customers and their own team — signal their intention.

When Business Line interacted with the chairman of each of these banks, all of them stated almost the same thing, albeit in their own words. Each said: "we will be focusing more on tier-I cities and towns that offer enormous business potential.''

The Chairman and Managing Director of Andhra Bank, Dr K. Ramakrishnan, while elaborating the purpose of his visit said: "I am looking at relationship beyond banking.''

Rupee factor

After a brief meeting with select customers, Dr Ramakrishnan said that when he sought their expectations from his bank, without exception, they expressed concern about the appreciation of the rupee. "Most of them are in the business of textiles export, where the margins are tight. They are worried that with the rupee rising to a new high (vis-à-vis the dollar), they would not be able to sustain in business or achieve targets and seek Government intervention as is happening in many other parts of the globe.''

Price stability

The price stability, according to him, would fall in place once the supply side of inflation is addressed. "The Reserve Bank of India is talking in terms of macro economic parameters.''

But how would Andhra Bank address this issue and on RBI's loan pricing direction to banks?

"In a free market, any one charging usurious rates cannot survive. He will be driven out. The rates though will stabilise eventually, but the regulator probably has its own reasons for asking banks to keep loan rates reasonable. The practice for banks is in having a cap on exposures,'' Dr Ramakrishnan said.

While not ruling out the possibility of another hike in rates, he said: "we had, during the last two upward revisions in the lending rates, not touched the mid-segment home loan rates.''

Performance target

On performance target, he said, "We are targeting a credit growth of 25 per cent and 15 to 16 per cent on the deposit side. We would shed bulk deposits and focus on low-cost deposits - current and savings accounts. We will extend finance support to the needy in housing.''

The bank is now concentrating on the `re-launch' of its `Kiddie Bank' scheme. The scheme, Dr Ramakrishnan said would be rolled out across the country within the next fortnight.

For better customer convenience, Andhra Bank is also contemplating to introduce the mobile biometric ATMs in bigger metros. "

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Tier-I cities, towns getting more bank thrust