SR Bansal, who assumed charge as Chairman and Managing Director of Corporation Bank in 2013, has been focusing on areas such as CASA (current account, savings account) deposits, quality credit with focus on MSMEs, retail and agriculture sectors, and improving asset quality for growth. Bansal reviewed the progress so far on these fronts, in an interview with BusinessLine . Edited excerpts:
Please highlight the progress made in the focus areas over last year?
Over the years, excessive reliance on the wholesale business had lowered the CASA (current account savings account), which, in turn, had a cascading effect on asset quality, net interest margin and profitability.
Now, the bank has shifted its focus to retail, MSME, agriculture and loans to corporates up to ₹50 crore on the asset side, and deposits up to ₹1 crore and CASA on the liability side.
How have the CASA deposits fared? What plans do you have to increase them?
The share of CASA deposits, at 19 per cent, is not really a comfortable position. We need to build up our low-cost funds and I strongly believe the bank’s CASA share will certainly go up in the days to come.
The bank has set up two separate verticals for focused monitoring of CASA growth in branches opened after April 1, 2010 and to popularise our new payroll product, which has attractive features.
These steps are yielding good results.
I have travelled across the country in the last year and gathered that Corporation Bank’s customer services and products are very good indeed.
Our new SB product ‘Corp Saral Plus’, introduced in May 2014 with a personal accident insurance cover of ₹5 lakh at a nominal premium of just ₹100, is a big success. The bank has garnered ₹388 crore through this product from 6.40 lakh accounts during the last six months. We will shortly introduce ‘Corp Saral Plus’ for NRIs (non-resident Indians).
What is the share of bulk deposits to total deposits?
We have taken a conscious decision to reduce the share of bulk deposits and improve that of retail and CASA deposits. The bank’s total deposits reached ₹1.91 lakh crore at the end of September.
The share of bulk deposits, including CDs, to the total deposits as at the end of September stood at 53 per cent.
However, in terms growth, while the bulk term deposits have registered a fall of over ₹3,300 crore against the figure in March, the retail term deposits have notched up an increase of over ₹4,400 crore during the same period.
The business plan for the current year is accelerated growth of CASA and retail deposits.
Your views on lending to agriculture, MSME and retail sectors?
Our priority sector advances, comprising MSME, retail and agriculture sectors, increased by ₹15,469 crore — a 36 per cent year-on-year increase — in September 2014, against overall year-on-year credit growth of 12.36 per cent.
What about large advances?
The portfolio to large industries has been built up over a period of time. The bank has not taken any fresh big exposure in the corporate credit segment. But growth in credit to large industries comes primarily from exposure to CDR accounts and under-restructured accounts as per consortium decisions for revival of industries and state electricity boards. We are selectively taking fresh and additional exposure to well performing and highly rated corporates. On account of a resurgent economic outlook, the bank envisages further improvement in growth in MSME and retail advances during the second half of the current financial year.
How will you bring down NPAs?
We expect that internal efforts will bring better results in cash recovery than selling assets to ARCs. Thus, we have initiated a multi-pronged strategy for NPA recovery by forming two separate verticals — one for recovery of NPAs of above ₹1 crore and another for below ₹1 crore. Besides this, we have set up two verticals to monitor standard accounts to avoid slippages.