MANGALURU: Notwithstanding the Covid 19-led disruptions, private sector lender Karnataka Bank has been able to maintain a steady performance with its business strategy ‘Conserve, Consolidate and Emerge Stronger’ paying rich dividends, tells Managing Director & Chief Executive Mahabaleshwara M S, in an exclusive interview. While the government has taken several measures to revive the moribund economy, more steps such as the facility of prompt repayment incentive, which is available for farmers, should be put in place for other sectors as well, he adds. Excerpts:
Karnataka Bank has been able to pull off a surprise by posting 12.23% year-on-year growth in net profit for the half year ended September 2020. How did you manage it?
A very comprehensive approach towards minimising cost, enhancing income and improvement in operational efficiency contributed to sustainable and significant growth in net profit. Our new business strategy, ‘Conserve, Consolidate and Emerge Stronger’, designed for the Covid-19 pandemic-affected year, is also paying rich dividends. We gave a lot of emphasis to the one-time settlement (OTS) route for recovery of bad loans and were surprised to see defaulters cming forward for settlement despite the challenges. Recovery was far better with regards to NPA and technically written off accounts.
Do you think the Centre’s recent announcements on interest waivers and loan moratorium will enhance consumers’ confidence? What other measures, according to you, are needed for economic revival?
Measures such as EMI moratorium, One Time Restructuring (OTR), Emergency Credit Line Guarantee Scheme (ECLGS) and waiver of compound interest — all of these together will eventually help in
economic revival. Besides, I would look forward to any type of support for those who contribute significantly for the economy. In the agriculture sector, there is a prompt repayment incentive facility. We should have a system wherein prompt repayment in all sectors is encouraged. Bankers, the regulator and the government should collectively work out sector-specific packages for the revival of the economy.
Under the emergency credit scheme for MSMEs, how much loan have you extended during March-Sept?
ECLGS was one of the novel schemes implemented in a time-bound manner under which we have extended loans worth about Rs 1,800 crore. The scheme acted as an emergency lifeline for MSME to tide over the financial crisis caused due to the pandemic and the subsequent lockdowns. Our MSME sector loan has also grown at 15 per cent during the Covid-19 pandemic, much higher than retail advances which stood at eight per cent. For us, MSMEs are the top priority as the sector is the largest employment generator.
You said your bank has started reaping benefits of KBL-Vikaas. Can you please elaborate on that?
KBL-Vikaas is a technology-led comprehensive and holistic transformation. Customers visiting banks for day-to-day banking activities have considerably reduced and this is evident from the rise in our digital transaction to 88.36 per cent. Now, we are also giving in-principle sanction orders digitally for home, auto and MSME loans. Earlier, what took about 30-40 days, is now happening in
just about 30-40 minutes.
Where do you see the Indian banking sector ten years from now?
The next ten years will see technology driving the banking sector. Adaptability is very much there in the DNA of Indian banks. Apart from strengthening the internal system and capital augmentation, the consolidation of public sector banks will also help us build a stronger financial sector over the next few years.