The slowdown in the economy should serve as an opportunity to restructure balance sheets and rework the business mix, if required. Banks have started shifting their focus from the corporate and infrastructure sectors to retail lending. Housing, education, and auto loans are the focus areas now, M. Narendra, CMD of Indian Overseas Bank, pointed out.

According to Shubhalakshmi Panse, Chairman and Managing Director, Allahabad Bank, the slowdown has given an opportunity to relook the bank’s business mix.

“This is also an excellent opportunity to tap the emerging markets in the Tier III and IV cities, where the growth has now shifted,” she said, at a Banking Colloquium organised by the Confederation of Indian Industry.

CDR Norms

According to her, promoters of various companies are “utilising the opportunity” of corporate debt restructuring (CDR) instead of undertaking business restructuring.

Stringent CDR norms that are likely to come into effect from April 2015 would help check such practices.

Emerging Strategies

A KPMG-CII paper on Indian banking released on Friday maintained that the sector was at an inflexion point. Uncertain environment and currency volatility were challenges.

According to the report, banks are already tapping urban and semi-urban areas as new growth points. Around 14,500 (or 58 per cent) of the 25,000 branches opened in the last five years were in such areas.

While focus on improving operating efficiency and outsourcing has seen increased adoption of technology, emergence of low-cost channels such as the Internet, mobile banking and mobile ATM facilities have gained acceptance.

> abhishek.l@thehindu.co.in

Related Topics