Do you feel the domestic economy may have troughed out and we are on path to regain old growth rates?There has been a very extensive push on reforms, within the limited ability of legislative changes. But the government has done a tremendous job of making such changes. The slow impact of that is already visible, with activity returning to capital markets on the back of liquidity which seems to have come back. But from a long-term perspective, till the time issues relating to slowdown in growth, fiscal deficit, currency and the like are not taken care of, the economy cannot go back where it should be. So, one needs to wait and watch.

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Do you see improving sentiment to aid your growth?Irrespective of the slowdown or the market conditions, our revenues have been growing steadily, which are reflected in the construction of our portfolio businesses. The largest pool of our portfolio – non-banking finance business – with a focus on SME financing has been growing, but we ourselves have slowed the disbursements, keeping in mind the overall economic situation. So, systematically, we have brought down our growth, but as far as demand for credit is concerned, that has not been challenged yet.

Obviously, there has been some uptick in our capital businesses, but we have been working very hard to ensure that even if the markets remain muted, we continue to build profitable businesses and whatever cost action needs to be taken, we have already done that. We have launched a new healthcare insurance business which to an extent is secluded from the market environment. In all our businesses if you see, we have been very prudent over the past two years and have taken corrective action to tighten our belt and make costs very prudent so that we continue to generate cash flows from all our businesses.

Your views on the Banking Bill passed recently?From an overall industry perspective, this has been a long-pending requirement from the Reserve Bank of India (RBI) to empower them more and maintain the health of sector and ensure public money is protected. This also enables them to think about coming out with final guidelines and start the process of issuing new bank licences.

Do you also intend to apply for a banking licence? As far as Religare is concerned, given that we are an integrated financial institution and 80% of our addressable market is in tier II and tier III towns, our businesses are very large and distribution focussed. So, it would be good for our customer base if we get a banking arm so that we can serve them in a better way. But we would wait for final guidelines to assess and see how we can align our business model to the guidelines which we can follow in spirit. Also, given that International Finance Corporation (IFC) has become one of our largest institutional shareholders, and it has a global expertise, we would learn from them how we can be more inclusive but simultaneously sustainable and profitable.

How strong are your chances?It’s a competitive landscape and everybody would be interested. Also, it would depend on how many licences would be granted. But when we look at ourselves, we feel our structure is completely adaptable to RBI’s requirement – whether in terms of holding structure, experience, presence in smaller towns and management team.

How does the recent investment from Invesco help your mutual fund business? We are among the very few late entrants into this business which despite difficult market conditions have been able to make profits. We acquired this business in a very distressed scenario three years ago and have grown from Rs300 crore assets under management (AUM) to Rs14,000 crore AUM today. Our partnership with Invesco would help grow this business further both domestically and overseas because it’s a global asset management giant with far better distribution reach and performance.

nitin.shrivastava@ dnaindia.net