The Hindu Business Line : `Inorganic growth, the way forward for IDBI'

MR V.P. Shetty, the newly appointed Chairman of the Industrial Development Bank of India, sees inorganic growth as the way forward for the bank in the coming days.

Mr Shetty said IDBI itself was looking to acquire a sound local bank with a good branch network. "We would like to have more branches and if we cannot grow that fast organically, we will see if a bank is available to us for consolidation."

All consolidations must be based on synergies, he said, and the combination of institutions should deliver the combined benefits as only then will the exercise be worthwhile. "The most important factor to be considered in consolidations is the human resources aspect. There should be a combination of regional interest, the interest of human beings and their interest in terms of working," Mr Shetty said.

"I strongly believe in inorganic growth, given the way banking industry is slated in terms of functioning, and the sheer size of events that are going to unfold. If we have to take up international projects, it would be difficult unless we have the international strength and standing," he said, speaking to newspersons in the first day in office the here on Friday.

Commenting on the road ahead for IDBI, he said the bank was prepared to meet the challenges ahead, even though the situation was tough in the present day scenario.

Infrastructure financing is the bank's core strength and in addition to that the bank will get into retail financing, Mr Shetty said.

"Since we have a responsibility to take up development finance activities we do require long term funds. It is always considered that long-term borrowings are costlier as compared to the low cost deposits of a bank. But now we are getting an arm with the merger of IDBI Bank, and with the conversion of IDBI into a bank, we will be strengthened in terms of our deposit base, which will reduce the cost of our funds," he said.

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