After having long remained a Rajasthan-based bank with more than 50 per cent of its business coming from the State, State Bank of Bikaner and Jaipur (SBBJ) now plans to turn its focus on other states by increasing its presence and launching customer-friendly initiatives to tap the younger population.
In an exclusive interview with Business Line , Mr Shiva Kumar, Managing Director, SBBJ, shared his views on an entire range of issues such as the bank's roadmap for growth, expansion plans, new initiatives as well as the possibility of merger of the bank with State Bank of India.
Nearly 750 out of the 925 branches of our bank arebased in Rajasthan. We want to now focus on making it a national bank by undertaking a number of initiatives such as increasing our branch network in other regions, launching customer-friendly initiatives and introducing tailor-made products for specific segments of customers among others. We plan to set up 90 new branches across the country this year.
We have also launched a customer-friendly initiative called ‘Mission - Five', which is Mission-Clean, Mission-Samay (time), Mission-Muskaan (smile), Mission-Thank You and Mission-Comfort. A branch would be expected to offer all these convenience to their customers and would be declared ‘Mission-Five' compliant if they can do so.
For long, we have had the disadvantage of not having too many young people in our team. So, we plan to recruit close to 2,000 clerks and 1,000 probationary officers this year to give the branches a younger look. We are also working on changing the ‘DNA' of the bank by bringing about attitudinal change in the mindset of employees.
Banks have been witnessing a slowdown in retail loan portfolio, particularly in home and auto segments. What has been your experience so far?
We have not seen slowdown in credit growth so far. We aim to achieve 18 per cent growth in business this year. For this, we are planning to tap the high networth individuals (HNI) segment for various retail products.
SBBJ is tying up with close to 200 car dealers to finance high value private vehicles. We are also tying up with some developers to give a thrust to our home loan portfolio. We are also looking at the possibility of offering festive discounts in the form of concession on interest rates for certain retail loans.
Do you think interest rates have peaked out? If not, then what will be the impact of further rate hikes on asset quality?
I feel interest rates have peaked out and there is little scope for further hikes. Moreover, merely hiking interest rates will not be able to curtail inflation. We need to address the supply side issues.
There is a marginal impact of rising rates on delinquencies. However, the inflation is pushing up costs and that is a big challenge. Asset quality will remain a concern this year due to the combined effects of rate hike and rising costs driven by inflation.
We had registered a net interest margin of 3.43 per cent during the quarter ended June 30, 2011. We have shed high-cost deposits to the tune of Rs 4,000 crore since the beginning of this fiscal, so we hope to sustain our NIM at three per cent this fiscal.
State Bank of Saurashtra and State Bank of Indore have already been merged with SBI. Do you foresee the merger of SBBJ with SBI in the days to come?
There are no plans of merging SBBJ with SBI in the immediate future.
What is your opinion regarding the deregulation of interest rates on savings bank account?
Deregulation of interest rates on SB accounts will drive unnecessary competition and might also destabilise the other interest rates which are determined keeping savings bank as the anchor rate. I feel the time has still not come for deregulation of SB rates.