It may not be a month since he assumed charge as the chairman and managing director of Dena Bank. But Ashwani Kumar, a veteran in the banking industry, is clear about the objectives, challenges and problem areas faced by the bank. In an interview with Megha Mandavia and Parnika Sokhi, he says an 18-19% credit growth is still within reach. Edited excerpts:
What are your top three objectives for the bank?
The priority would be to make the bank a technology leader, improve customer experience at the branch level and increase focus on CASA (current accounts and savings accounts) on the liability side and retail and SME lending on the asset side.
How do you plan to improve CASA?
I have asked branch managers to comb 200 metres around the bank branch for potential customers even if these are small businesses. We are also waiving off the fee on not maintaining minimum balance in inoperative savings accounts to reactivate them. About 12% of the inoperative accounts turned operative in the past two months. We are working on some new savings account and current account products to shore up CASA.
Bulk deposits are still higher than the government mandate of 15%...
It’s about 19% right now. It won’t be difficult to bring it down to 15% by the end of March 2013. We will have to shed about Rs3,000 crore to cut dependency on bulk deposits. Ultimately, it might be lesser in case other deposits pick up. We expect deposits to grow at 20-21% this financial year.
How much do you plan to grow in the gold loan portfolio?
We started offering gold loans in April this financial year. It’s at Rs50 crore as of now and we are hopeful of reaching Rs100-150 crore by the end of March 2013.
Would you continue to be selective in corporate lending?
We were selective because of the slowdown in the economy. Now, with the business environment improving, we will be slightly more aggressive. We may also look at lending towards power sector once the issues in the sector are resolved. We had reduced exposure to infrastructure from 26% to 19% and going forward, we would like to maintain it at same level. We aim to close the year with 18-19% credit growth.
Would the bank be able to achieve priority sector lending target this year?
We are at 30% right now. By the end of current financial year, we should be able to reach 35% as against the regulatory mandate of 40%.