Karur Vysya Bank to focus more on NRI deposits, home loans

Two months after assuming office as the Chief Executive and Managing Director of Karur Vysya Bank, Mr K. Venkatraman, in a chat with Business Line said “the process of building this institution will continue. We will build on our strength, look at products and structural gaps that need to be addressed as we move on”.

Earlier, he was with SBI Global Factors. His past (two-decade long) exposure in the area of high value advances, international and retail banking and experience in the factoring services space, he said would help strengthen KVB. “I have always preferred operations assignment to working in the administrative office,” he added.

Network expansion

The bank is targeting a network of 800 branches by 2016, when it would be celebrating its centenary year. The branch network stands at 372 at present.

“This increase in network needs huge levels of scale, increased product focus and profitability as we scale up. This should happen in a scenario where competition is intense,” the KVB Chief noted.

When asked about its 2016 business target of Rs 125,000 crore, Mr Venkatraman seemed quite positive about achieving this target, but quickly added that “the present level of operation would not take the bank to that height”.

“We will take a prudent approach without altering the characteristic of the bank, become more aggressive without compromising on the quality of assets. Margins might shrink, but we will not let this impact the asset quality,” he said.

He also said that KVB would ensure that the Return on Assets remains intact rather than Net Interest Margin.

HR challenges

“Competition will not be just about markets any more; the challenges on the human resources (HR) front are bound to be tougher, with public sector banks looking to hire huge numbers in the coming years.

“Recruitment is a continuous process here and we are seeing that candidates not just from the IT services sector, but from other nationalised banks are also looking at career options in KVB. We have a huge requirement at the senior level and we intend to mix traditional banking practices with modern day products and services.”

Reverting to the recommendations put forth by Boston Consulting Group, Mr Venkatraman said, “I have tweaked the organisation structure to handle scalability of operation; I am looking at segmentation of all business groups; separating operations wing and at standardised branding of all our officers. We are working on these among other recommendations made by BCG”.

On products, he said, ‘there will be more focus on NRI deposits, on forex and we are also proposing to redesign the home loan product and a couple of other products so that the market responds positively to these and make them more user-friendly. We are also planning to launch a credit card and identify areas where we need to be more focussed.”

On interest rate hike, he said, “it might remain high for some time, but this makes it easier for us to plan well ahead of schedule. In fact, we delayed the base rate hike for some time, but when we did initiate the change, we did not follow the bigger players in the industry. We did what we thought was best for our customers.”

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