Karur Vysya Bank’s digital transformation exercise seems to have started yielding results.

The bank’s total business at the end of the first half of the current fiscal grew to ₹1.06-lakh crore, backed by a robust credit growth of 9 per cent.

Q2 performance

The bank’s net profit at the end of the second quarter of this fiscal rose 10.69 per cent to ₹84 crore, compared to ₹76 crore, clocked during the corresponding period of the previous year.

Net interest income grew 4.32 per cent to ₹579 crore (₹555 crore), and non-interest income stood at ₹176 crore.

NIM, however, dropped to 3.57 per cent from 3.81 per cent during the corresponding period of the earlier fiscal. Gross and net NPAs stood at 7.70 per cent and 4.41 per cent, respectively.

Technology drive

PR Seshadri, Managing Director and Chief Executive, KVB, told BusinessLine that the bank is in the process of transforming itself to participate in the world of tomorrow.

“Our retail products and working capital advances for SMBs (up to ₹2 crore) have gone digital,” he said, and explained that a borrower seeking an auto loan today would be able to get the approval in 10 minutes and disbursement in 30 minutes.

“We have done away with paper work completely. This has helped improve productivity at the branch level, besides enabling us to assess the quality of the borrower we on-board.

“In the case of SMBs, for an assistance of up to ₹2 crore, it is now possible to give the approval in 30 minutes. It is tech-driven, transparent, and much easier than the processes we followed earlier.

“Because of the cumbersome process, the branch heads were hitherto focussed on big-ticket borrowings (as the effort involved to sanction a loan of ₹25 lakh vis-a-vis ₹5 crore was roughly the same), losing the market to NBFCs for small-ticket loans.”

“We are hoping to recoup our share. Incidentally, we are the only institution in the country to have a fully digitised working capital product.”

He conceded that some corporate exposures had turned bad, but the bank has, over the past year, aggressively pursued such accounts.

“KVB is a 102-year-old institution. Tradition is important, but we understand that we have to combine modernity with tradition to survive, and that is what we are aiming to do – driving technology to transform the bank,” said Seshadri.

With a customer base of 7 million, KVB has an edge over some of the national players in the industry . “We are not looking to supplant the bigger players. Given the fact that we have our strength in the semi-urban and rural areas where competition is relatively less, we want to leverage on it. The market potential is huge,” he added.