Assuming charge during the pandemic could not have been easy, more so if you are heading an organisation. But for Ramesh Babu Boddu, Chief Executive Officer and Managing Director of Karur Vysya Bank, the timing proved “a rich learning experience”, as he managed to get a 360 degree perspective of the 104-year-old institution during the quarantine period (after relocating to Karur from Mumbai)

“I was initially perplexed about the quarantine, thought it could be an unnerving fortnight, but looking back, I now realise that the discussions I had with every stakeholder – be it investors, customers, branch managers or the various teams within the bank – opened my eyes to certain ground-level realities, an opportunity to understand the SWOT (Strengths, Weaknesses, Opportunities and Threats) of the bank via 55 video conferences in 14 days,” Boddu told BusinessLine . “I don’t think it would have been possible to discuss as many things if I had come over to office soon after my arrival from Mumbai,” said the the former Deputy Managing Director of State Bank of India. Excerpts:

What did you identify

as the bank’s weakness?

The credit growth had remained rather subdued over the last 2 to 3 years. Though prima facie, it appeared so, it is not right. The board’s conscious decision to reduce the corporate exposure to ₹125 crore, from the earlier exposure levels of ₹300 crore to ₹400 crore, made it look as if there was no credit growth.

The rundown in the corporate book had offset the growth on the retail and commercial side.

Where do you see opportunities?

The digital initiatives undertaken, both on the retail and commercial fronts, are appreciable; the average staff age is 35 years for a legacy organisation of 100+ years, and this is to our advantage. Going forward, we need to hear, understand their (employees’) pain points and fix the processes.

The focus would be on MSMEs (up to ₹25 crore) because our strength lies in this segment; we have pricing advantage. And on the commercial segment, we would like to revive our focus on traders, besides CASA and term deposits. We are planning to enter into the hinterland through the banking correspondent route. There are around 130+ BCs now.

We will strengthen our focus on jewellery loans, go back to basics and mobilise the team.

Considering the reduction in corporate exposure limit, will you lie low on consortium lending?

I am not saying that we will not go for consortium lending. We will where we have a say and such exposures are available.

How is the credit off-take?

It is slow; the unutilised capacity levels are still high, and on the retail side, too, many are holding money because of the uncertainty on the job front, coupled with the fear of incurring huge medical bills, should they fall a prey to the deadly virus.

The demand pick-up has also been sluggish. Many have availed moratorium – not because of paucity of cash – but because of uncertain market conditions.

In such a scenario, what initiatives are you proposing to take

to create momentum?

In addition to undertaking calibrated expansion of our branch network, we have been exploring other avenues to grow our reach. We have seen steady progress in Project NEO (non-branch channel), which was kicked off last year. The testing time for uptake of this initiative was Covid, as NEO focusses on optimising our digital capabilities to establish new distribution channels.

Through its unique API platform, NEO helps integrate with multiple financial institutions across secured and unsecured lending space to offer new products to both retail and SME customers.

The API platform has the flexibility to accommodate any lending or liability product in the industry. NEO is enabling the bank to achieve operational efficiency; the delinquency is low and we are also able to explore strategic partnerships.

We are also contemplating to set up a full-fledged precious metal division, working on a retail credit card. KVB would soon be able to offer all services under one roof.

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