South Indian Bank surges ahead, riding on low NPA and focussed recoveries
Indian banking industry has very low NPA (Non-performing assets) levels compared to its global counterparts and has shown business growth even during economic slowdown. The system is strong under the review and guidance of RBI and the customers also continue to get benefits of round-the-clock banking with the new facilities like internet banking and ATM technologies.
The interest rates are also higher, compared to American and European counterparts, with around 9-10 per cent guaranteeing a risk-free return. Even after 43 years of nationalisation of banks, only 50 per cent of the country has bank accounts which show the future potential of the industry, said VA Joseph, MD and CEO, South Indian Bank.
On importance of banking, he said, “The public distribute their investments in different categories like mutual funds, gold, or fixed deposits schemes. The safety, convenience of operation and liquidation are three strong reasons why people save money in banks. People can get the money whenever necessary which is not so easy with either mutual funds or in gold. Banks will continue to be part of the people lives in future keeping all these benefits.”
“We at South Indian Bank aimed to inculcate saving habits in school children. We went to schools and marketed the idea of opening account and saving money for the students who finished 12 years of schooling. Today, Children get lot of money especially during birthdays. The idea was to make them prepared for savings and understand the responsibilities of life. Around 7.5 lakh students have opened during that initiative (2008-2009).
“We also started SIB Mahila which is a savings and recurring deposit scheme which provides insurance and security to the women’s belongings like watch, mobile from burglary. We target different categories of people and take banking closer to them.
“We want to take banking to rural and semi-urban areas and make banking easily accessible to common man. The bank opens 50-60 branches every year. We have opened 7 branches and 43 are in pipeline across various places in the country. Most of the metros have sufficient banks and there is huge potential in rural and semi-urban areas where people do save a lot, compared to cities,” he said.
The SIB continues to make profits over years. The total business of the bank stood at around Rs.64,000 crore with net profit of Rs.401.66 crore during last fiscal.
The gross NPA is at around 0.97 per cent, and the net NPA is 0.28 per cent, which are much below to the sector average. The advances and deposits grew by 30 per cent and 25 per cent respectively in last fiscal.
“The strong asset quality, recovery team and the service provided by the bank employees enabled to achieve this growth during tough economic situations, “ he added.
The bank aims to achieve a target of `1 lakh crore in total business by March, 2014 with 1,000 ATMs and 800 branches and an employee base of 8,000 people. The bank is targeting total business of Rs.78,000 crore during this fiscal. The bank is in the process of opening corporate branches in six major metropolitan cites to target HNIs. There would be specialised team in these branches who report directly to head office for the quick decision making and for the high standards of service.