The Hindu Business Line : Business growth inorganic way<br>NBFCs fit into our scheme: IndusInd

The Managing Director of InduInd Bank, Mr Bhaskar Ghose, told Business Line that, "It is the NBFCs that fit into our scheme for business growth." He said that IndusInd had already looked at some of the NBFCs.

However, he said that IndusInd was not too keen on acquiring another bank immediately though it had taken a look at some of the old and new private sector banks for acquisition. The new private sector banks, he said, did not fit into IndusInd's business growth requirements.

As for the old private sector banks, he said, "For a bank like us, there are some good banks, but there are some problems." The impediments faced by IndusInd in acquiring old private sector bankswere legacy related. But more than legacies, he said, most of the older banks were regional in character. Besides, he said that staff strength in some of these banks were far too high.

NBFCs, on the other hand, he said were much more leaner. He also said that the bank's experience after the merger of Ashok Leyland Finance Company Ltd, was positive and was also one of the major factors that influenced it to look at NBFCs rather than banks for acquisition.

IndusInd Bank also wants to leverage on the marketing strengths of the NBFC for both credit as well as deposit growth, he added.

For the last fiscal, IndusInd's credit portfolio grew by about 50 per cent. Net of securitisation, the growth, he said was about 26 per cent.

During the last financial year, 2004-05, the bank had securitised Rs 3,600 crore of assets.

This made it the second largest issuer of securitised paper in the country.

This large issue had helped it fund its asset growth during the period and also maintain its capital to risk weighted assets ratio at over 12 per cent, he added.

However, this year, he said IndusInd would slow down its pace of securitisation. "In securitisation, we are losing out on interest margins," he said. Instead, he said, the bank was pushing for a growth in its deposits portfolio.

The focus, he said would be on retail deposit growth.

The retail deposit growth was also partly driven by the volatile nature of institutional deposits, which are mostly short-term in nature, he said.

Growing its retail deposit base was intended for sustaining its credit growth momentum, Mr Ghose said.

The bank's credit focus would continue to be on small and medium enterprises for sustaining the growth, he added.

The bank, he said, had adopted Crisil's risk management module for credit appraisal of SMEs, he added.

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