RBL Bank has avoided some sectors and situations in the past 7-8 years, which has helped in growing and improving the profitability, says Rajeev Ahuja, executive director of the bank. In a chat with Anurag Shah, Ahuja said the bank expects its profit growth for the fiscal to remain between mid-high and 20%. 

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What helped RBL Bank perform well at a time when there is a pressure on the banking sector and consumer demand is down? 

Our portfolio is diversified, and we have avoided some sectors and situations in the past 7-8 years. Our base is relatively low when compared to larger banks, and this has helped us in growing and improving profitability. Our net profit has grown 41%, net interest margin stands at 4.31%, CASA (current account, savings account) has grown to 25.8% from 25% in March. Similarly, deposit growth stands at 35%. So, all business engines are running smoothly. Besides, you can do business if the resources are placed at places where opportunities are available. Some time is required to bring the environment in shape. Besides, the actions of RBI and the government in the last 4-5 months to improve the liquidity conditions have helped the borrowers, banks as well as NBFCs. 

What is your exposure to the NBFC sector and are you planning to purchase any portfolio?

We have a moderate exposure to NBFCs, and we have been saying for the past 3-4 quarters that we can’t see any stress in it. Our NBFC exposure before September 2018 was a well-planned move and we don’t want to expand it further. As far as portfolio purchase is concerned, we will go for it only if it comes under the ambit of our business but after analysing it. Our exposure will remain intact at the same positions and we will continue working with the customers with whom we have been engaged till date, except advances in payment and deposits. 

How is the loan growth at a time when there is a slowdown in the economy?

Our loan growth in wholesale bank stood at 22-23%, and retail, which includes financial inclusion, cards and business loans, grew 50-52%. So, we have several engines that are growing, like credit cards, whose numbers in the market have gone up to 20 lakh. I feel that our growth will stand around 30% across the year. 

What are your expansion plans?

We have opened eight metro urban branches in this quarter and plan to open at least 50-75 branches in the next nine months. Besides, the number of our inclusive finance and business correspondent branches has gone up by 20 this year and we plan to add 100-125 branches in the segment this year. 

Any specific geography where the branches will be opened?

Branch banking will be expanded in big cities while the financial inclusion is being carried out across the country. I think, we have it in 20-22 states and maybe more. We have more than 1,000 financial inclusion branches and this number will go up to 1,100-1,150 branches by the end of this year.

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