The Hindu Business Line : Old pvt banks resent tag; say size does not matter

Raise a question on size to any of the old private bank chiefs, and all of them defend their space strongly. The common refrain – “We too have a role to play. We cater to a niche segment and there is room for growth. A vast majority of our populace still remain unbanked, under-banked. Small-size banks exist even in developed economies.”

As Mr N. Kamakodi, Executive Director, City Union Bank, put it in a recent interview to Business Line, “The argument about size started about 10 years ago. If that were true, we should have collapsed by now.”

Most of the old private banks – be it Karur Vysya or Lakshmi Vilas Bank, South Indian Bank, City Union Bank or Federal Bank – have existed for over eight decades, grown in size and strength, imbibed technology and are in the process of establishing a pan-India branch network.

“We delight customers by blending tradition with technology,” says Mr P. T. Kuppuswamy, Chairman, Karur Vysya Bank. That seems like the theme that all of them like to play on.

Dr. V.A. Joseph, CEO, South Indian Bank, bristles at the tag of “old”. He says his bank is no longer “an old private bank”, but a “next generation bank.”

The distinction between the old and the newer banks was simply their relatively later start and therefore easier adoption of the latest technology. Now that gap seems to be narrowing. In fact, technology adoption has been relatively easy for these banks compared to large-sized players such as public sector banks.

The LVB Managing Director, Mr V.S. Reddy, admits that the tasks ahead could be quite challenging for his bank. ‘Customers’ expectations are rising by the day. There is a huge demand for product innovation, for newer financial instruments. We will be unveiling some of these very soon,” he said.