Karnataka Bank will reduce its exposure to the corporate advance portfolio, according to Mahabaleshwara MS, Managing Director and Chief Executive Officer of the bank.
Answering the queries of shareholders at the 96th AGM of the bank, which was conducted on a virtual meeting platform on Friday, he said the lender has been realigning its advances portfolio as its experience with the corporate exposure has not been that great.
The focus is on retail and mid-corporate advances, whereas the bank’s corporate advances are coming down. It is a very calculated move the bank is making, he said.
When some shareholders asked about the reported cases of frauds, he said many of these frauds had happened in the consortium advances where the bank was a minor stakeholder
Stating that the bank had taken proactive steps, he said the bank had taken steps to declare early in one of the NBFC fraud cases. A few of nationalised banks in that case had declared it subsequently, he said.
When one of the shareholders suggested the bank to be more aggressive, Mahbaleshwara said this is the time when the bank has to be really cautious and conservative because of the external situations. “A reasonable combination of aggressive and cautious approach will be the hallmark of Karnataka Bank,” he said.
Dividend
On the demand for dividends, he said the bank could not come out with dividends because of the general instructions issued by the regulator. Karnataka Bank will be the first one to issue dividends when the opportunity is given, he said, adding that the bank has a strong record of declaring dividends for 93 years in its 96 years of existence.
To a query on the Covid moratorium to borrowers, he said it is the responsibility of the bank to extend a helping hand to all needy borrowers.
The bank has extended this moratorium facility to all the eligible borrowers as per the RBI guidelines. These borrowers were under temporary stress.
“We have been in regular touch with them. They will come out of this category once the situation improves. This is a helping hand which they deserved,” he said.
On the capital-raising plans of the bank, he said it may take a call regarding its plans for a QIP depending on the market conditions.
“However, my emphasis is the your bank is well capitalised. Our policy is to have at least 1 per cent over and above the regulator’s requirement. We have comfortable track record as far as CAR is concerned. We will definitely continue to hold the ratio at a comfortable level,” he added.