Professional Documents
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Financial Express
Financial Express
18 22
‘We aspires to become ‘We are a delta on the
a global bank’ Indian economy’
K R KAMATH, ADITYA PURI,
MD&CEO, Punjab National Bank MD&CEO, HDFC Bank
BEST BANKS
INSIDE
Editorial
Indian banks need to scale top 4 26 32
Theme Story
Gamechangers in the Indian ‘Emerging as a lender ‘We will cater with
banking sector 6
Methodology Rationale
to the common man’ a suite of services’
Looking to strengthen and consolidate, M VENUGOPALAN, KALPANA MORPARIA,
maintain credit quality and profitability 10 Chairman, Federal Bank CEO, JP Morgan
Nationalised Bank
Rank 1: Punjab National Bank 18
Rank 2: Bank of Baroda 20
Tables
Detailed rankings with banks
categorised into public sector
banks (PSB), Old Private Sector
Banks (OPSB, New Private
Sector Banks (NPSB) and 56
Foreign Banks (FB) 38
Indian banks
need to scale up
T
HE global financial crisis and its aftermath forced banks to introspect about
FE-EY
BEST BANKS
the kind of financial sector architecture India should have in the years ahead.
Indian banks escaped the contagion because they were highly regulated at
SURVEY 2009-10 home and not too integrated with the global financial system in terms of sharing the
risks inherent in the trillions of dollars of worthless financial products.
But this does not mean that a rapidly rising Indian economy and its financial
Chairman of the Board sector can avoid integrating with the global financial system. India cannot become a
Viveck Goenka
global player unless its banking system reinvents itself to deal with the thousands
Group Editor-in-Chief of businesses which are doubling in size every 4 to 5 years. The one key learning
Shekhar Gupta
after the financial crises was that Indian banks needed to have size. When
Managing Editor international credit delivery froze for several months after the Wall Street crises,
M K Venu
foreign lenders stopped lending and Indian banks were called upon to rescue
Project Co-ordinator companies. Unfortunately, Indian banks found they did not have big enough balance
Akash Joshi
sheets to meet the exigencies .This resulted in a healthy debate over how Indian
Editorial Co-ordinators banks can actually build scale to not only fuel the global ambitions of its domestic
Sitanshu Swain, Ayesha Dominica Singh,
Sushila Ravindranath businesses, but also to take banking to the next 400 million in rural India.
The debate over creating a few Indian banks which rank among the top ten in
Editorial
Mahalakshmi Hariharan, Kumud Das, Asia is not a new one. But it has assumed fresh urgency in the context of the balance
Saikat Das, Sajan Kumar of economic power rapidly shifting towards Asia. God forbid, if there is another
Desk
financial meltdown and a double dip recession in the West, India will need banks of
Ayesha Dominica Singh the size and scale which will keep feeding the growing domestic economy. The real
Research Team
macro-economic challenge is of garnering another 10% of GDP as savings over the
Sujith Pillai, Sandeep Nalge, Tara Boi next decade. Banks have a big role in realising this objective. Initially the
Photographers
government thought it could persuade public sector banks to merge and thus create
A Srinivas, Mahindra Parikh, Vasant Prabhu, scale. There is a counterview that such mergers cannot be forced in a top down
Prashant Nadkar, Ganesh Shirsekar, manner, and must be effected in a bottom-up organic way based on real synergies.
Dilip Kagda, Pradip Das, Ritika Jain
The jury is still out on this one.
Design Team Pranab Mukherjee intends to create more competition by issuing new banking
Manoj Bhramar, P L Santosh,
M P Singh, Rohnit Phore licenses. This is good news ; more competition will strengthen the domestic
financial sector and will create conditions for consolidation.
Marketing Co-ordinators
The Express Group This year FE best Banks has introduced a new test –liquidity which measures
Space Marketing Team how much a bank is in a position to meet its liabilities with current assets. In this
Production context, some banks which had a much more diversified base of small depositors
B R Tipnis & Team had lower bulk borrowings to meet growth on the lending side. Many banks are now
Printed for the proprietors, returning to the virtue of lowering the borrowing to deposit ratio. We hope the
THE INDIAN EXPRESS LIMITED,
by Ms Vaidehi Thakar at
analysin the FE Best Banks Awards would help in creating new standards for India’s
The Indian Express Press, Plot No. EL-208, banks to move to the next level of globalization as well as localization i.e taking
TTC Industrial Area, Mahape, Navi banking to the next few hundred million unbanked in rural India. We are thankful to
Mumbai 400 710 and published from
Express Towers, our knowledge partner Ernst & Young for evolving newer standards to assess the
Nariman Point, Mumbai 400 021. strength, profitability and efficiency of banks.
H I G H WA Y S
TUNNELS
TOLL -ROADS
AIRPORTS
R E A LT Y
Conventional way
IBR/Kautilya 133
THEME STORY
Illustration:
ROHNIT PHORE
Gamechangers in
the Indian banking sector
Viren H Mehta domestic system with the best in the International experience with
world, even if it appeared financial inclusion has sufficiently
T
HE Indian banking sector has conservative at times. proved that achieving growth,
emerged as one of the strongest As the world recovers from the aggressively tackling competition and
drivers of India’s economic global financial crisis, Indian banking social inclusion can go hand in hand.
growth. Positive changes witnessed in has remained resilient while con- Indian banks will tremendously
the last two decades have impacted tinuing to provide growth benefit themselves and the society by
every aspect of banking, ranging from opportunities. With the increased developing focused strategies to
regulatory standards to customer participation of new private sector augment the outreach of their
management. Indian banks adapting and foreign banks, the Indian banking services to attract the mass market
to the changing landscape along with industry has become fiercely com- and consider it as a potential business
the vision of the regulator and the petitive. Competition will be further opportunity than as a regulatory
Government in shaping the future intensified with the proposed entry of mandate.
growth of banking were two of the new private players and non banking As urban markets get adequately
noteworthy features of this financial companies (NBFCs). penetrated the competition to sustain
transition. and grow the market share, maintain
While banks evolved their Financial inclusion margins will force banks to look for
strategies in response to increasing Given the sheer size of the newer markets. With rural
competition and changing customer unbanked population in India, the development gaining a prominent
requirements, the regulator guided its goal of financial inclusion not only position on government agenda,
growth with policies of gradual carries tremendous social appeal, but income, awareness and aspirations of
liberalisation and benchmarking the also makes definite economic sense. the rural population are bound to
increase. Banks quick to establish effectiveness of mobile technology nearly negligible and product
presence in the vast hinterland and will drive regulations that allow differentiation is replicated with ease.
customise financial products for the greater use of this technology for This has led to customer
poor will capture growth banking transactions whilst understanding and superior service
opportunities. Deployment of a effectively controlling it abuse. gaining tremendous prominence.
combination of multiple delivery To profitably stay in the race,
channels capable of offering timely Risk management successful banks are adding a new
convenient and cost-effective services The Indian banking industry is dimension to customer engagement.
will stay ahead of the curve. expected to witness unprecedented They are now adopting a complete
A feasible option to explore would growth in the volume of business in account-centric approach. This
be to effectively partner with the coming decade and this brings essentially involves acquiring a
microfinance institutions, local with it huge challenges for risk customer at an early stage and then
communities, business management. The financial turmoil building a long-term relationship,
correspondents even NGOs to deliver also underlined the indispensability offering different products and
financial services and benefit from of the process of internal controls, services not only suitable for different
their reach. Use of information corporate governance and risk life stages of the client.
technology is another valuable tool. management.
A bank with sound risk Human capital development
Consolidation management practices in place will be The skill level, attitude and
To survive in an increasingly able to precisely ascertain the credit knowledge of the employees have a
competitive environment, market profile of its borrowers, resulting in substantial bearing in determining
dynamics point towards attaining a enhanced ability to predict default, the competitiveness of a bank.
sizeable scale and capital base, Needless to say, banks making
possible only through consolidation. Quality risk investments in their human talent
Backed by political will and will reap the benefits.
favourable economic variables, the management systems Cost optimisation
long impending objective to develop a could very well act to the Multiple channels, varied
few Indian banks of global scale is no customer profile and vast geographic
longer based
advantage of a bank spread have contributed to the
on surreal expectations. in a country like India, increased distribution cost for banks.
To be relevant on a regional or which has a shallow Banks should target the optimal
global basis, it will be essential for mix of channels to reach the right
Indian banks to explore inorganic documentation customers at minimal cost. Banks are
expansion within and outside India. of credit history increasingly leveraging technology to
achieve economies of scale in
Mobile banking reduce bad debts and raise operations, besides aiming for
With the onset of mobile banking, collections. This will in turn enable administrative efficiency.
the industry finds itself at the lower capital requirements, improved Another focus area is outsourcing
threshold of the next major performance and higher risk adjusted of non-core functions and banks that
technological leap. M-banking offers rate of return. manage these challenges will be able
significant cost-saving advantages by The proposed implementation of to differentiate themselves in the
way of reduced transaction costs and advanced approaches of Basel II will market.
is even expected to replace many ensure better quantification and
delivery and payment systems. The accounting of various risks thereby Conclusion
large and ever-growing mobile base ensuring more holistic risk The banking sector in India offers
provides banks with the opportunity management system in the Indian huge opportunities. Upward direction
to offer services in areas where they banking industry. of interest rates, increasingly
have a limited branch presence. M- Quality risk management systems demanding customers, focus on
banking can be an effective tool for could very well act to the advantage of financial inclusion, technological
capturing the unbanked rural market a bank in a country like India, which advancements, competition for
as almost 50% of new mobile has a shallow documentation of credit human talent and efficient utilisation
subscriptions come from rural areas. history, especially in retail banking, of a bank’s resources are some
M-banking can be made more and a nascent culture of credit inherent challenges, which need to be
incisive if challenges such as information sharing. addressed to unleash the competitive
awareness, coverage in rural and advantage offered by the Indian
semi-urban areas, widening the scope Account-centric approach banking sector and energise growth.
of banking facilities, transparency With rise is competition, banks are
and security issues are addressed grappling with increased customer The author is director, Ernst & Young
efficiently. The pervasive migration as switching costs are India Pvt Ltd.
Illustration:
ROHNIT PHORE
T
HIS year’s edition of the FE-EY Despite the financial turbulence, banks, 6 new private sector banks
India’s Best Banks Survey is set the economic growth of India and 12 foreign banks based on their
against the backdrop of remained reasonably unscathed. natural genres.
recovery in the global economy after As ever, each category of banks - Five major criteria were selected
the widespread financial crisis. The public, old private, new private and to compare performance of the
Indian economy continued to grow at foreign banks face its own unique Indian banks. These criteria are -
a decent rate as compared to the rest of challenges ranging from credit Strength and Soundness, Credit
the world. However, the current crisis defaults and restructuring of loans, Quality, Growth, Profitability and
has exposed certain limitations and liquidity, reputation and dwindling Efficiency. Considering the current
weaknesses. Liquidity problems and net interest margins to technology scenario of Indian banking, compli-
credit defaults have made banks more and manpower. mented with moderate economic
risk-averse. A gradual shift from Considering these aspects, Ernst growth, we believe every Indian
"Managing Crisis" to "Managing & Young has ranked the players with- bank would be evaluating itself and
selected to compare banks on Credit nance of their networth. Hence, this ance, improved technology platforms
Quality. The rate of increase in gross sub-criteria is assigned a weight of demand that the human, technologi-
non-performing advances compared 0.10 that are a notch lower in cal and financial resources be more
with the rate of increase in gross comparison with other aforesaid efficiently deployed and leveraged.
advances, and the rate of increase in sub-criteria. Therefore, Spread/Total Assets,
net non-performing advances com- Return on Assets, Yield on Operating Expenses/Total Assets,
pared with the rate of increase in net Advances, Return on Networth, Cost Business Per Employee, Profit Per
advances are considered to be of of Deposits, Cost-Income Ratio and Employee, Non-Interest
relatively higher importance to a Return on Investments are the sub- Income/Total Assets, Profit Per
bank’s management. Accordingly, criteria selected to measure banks Branch are selected as sub-criteria to
these sub-criteria are assigned the based on Profitability. The stakehold- measure Efficiency amongst banks
highest weights of 0.25 to assess ers would closely focus on Return on in India.
Credit Quality. The increase of Gross Assets and Return on Shareholders’ Spread/Total Assets and
NPA has been assigned the next level Funds i.e., Networth. Thus, these Operating Expenses/Total Assets
weight of 0.20. One of the policy sub-criteria are also assigned higher measure Efficiency in use of
measures to assist businesses to tide weights of 0.20. Currently, different resources and these are assigned
over the economic slowdown was to constituents of banks would focus at weights of 0.25 and 0.15 respectively.
encourage banks to restructure loans Cost of Deposits and managing costs. Business Per Employee and Profit
to customers without affecting their Per Employee measure utilisation of
classification. Through this special human capital and are assigned
regulatory accounting treatment, weights of 0.15 and 0.20 respectively.
although these continue to be classi- With the objective of garnering
fied as performing, they evidence deposits and penetrating under
inherent credit weakness. banked areas and population, Indian
Therefore, the quantum of restruc- banks are increasing their branch
tured loans, introduced this year, network and accordingly profit per
and networth rendered non-perform- branch has been considered as one
ing are the next important aspects of of the sub-criteria to measure
Credit Quality and are assigned the efficiency. NII reflects the abili-
weights of 0.10. Additionally, the por- ty of the bank to charge its
tion of a bank’s gross advances com- customers for its services
prising gross non-performing and augment the bottom line
advances is assigned a lower weight of the bank without requiring alloca-
of 0.10. tion of capital and hence reflects use
Growth in Total Assets, Advances, of set organisation skills and net-
Deposits, Net Profits, Net Interest Success will be work. Therefore, the last two sub-cri-
Income (‘NII’) and Increase in Net teria are assigned weights of 0.15
Worth are selected as parameters for
predicated on how banks and 0.10 respectively.
assessing Growth. The need for shape their strategies to The results of the ranking are
increasing market share in deposits support the Indian based on financial performance of
to fuel its funding requirements of banks during FY 2009. While some
banks on an effective basis have economy emerging from may not concur with the aforesaid
resulted in assigning higher weight a slowdown dissertations, we believe that in the
to growth in Deposits of 0.30, fol- current Indian environment, the
lowed by equal weights of 0.20 for Accordingly, both these sub-criterion above ranking methodology is most
growth in Advances and Net Profits. are equally important and are also appropriate - so much so that when
Growth in Total Assets would not assigned equal weights of 0.20. stress tests were performed, the
necessarily result from growth in Whereas Yield on Advances and resultant top ranking banks were
banking operations as banks could Return on Investments are impor- significantly the same.
use the safe-habour of government tant, in the current interest rate sce- Going forward, the success for the
investment, instead of lending. nario, these sub-criteria are assigned banking industry as well as individ-
Hence it is assigned a weight of weights of 0.10, a notch lower in com- ual institutions will be predicated on
0.10. Further, with the current parison. how banks will shape their strategies
stress on net interest margins due to Banks that are able to adapt quick- to support the Indian economy
current pressure on interest rates, ly to the evolving economic environ- emerging from a slowdown, encom-
focus on improving these has also ment, are the ones that create most pass the vastly under and un-banked
sharpened. With implementation value. The increased competition for regions and population and provide
of standardised Basel II norms, human and financial capital, the much needed financing for
banks are also focussed on mainte- increased expectation on perform- Indian structure. ◆
៑ FE-EY India’s Best Banks Survey (e) Net Profits Growth (0.20)
(f) Deposits Growth (0.30)
Framework
(c) GNPA/Gross Advances (0.10)
(d) Increase in Gross Non-Performing
Assets (‘GNPA’) (0.20)
(e) Increase in GNPA/Increase in
1. Banks were categorised into public sector banks Gross Advances (0.25)
(‘PSB’), old private sector banks (‘OPSB’), new private (f) Increase in NNPA/Increase in Net
sector banks (‘NPSB’) and foreign banks (‘FB’). With the Advances (0.25)
objective of making the comparison more meaningful, (v) Strength and Soundness (0.25)
banks with total assets less than Rs 5,000 crore as on (a) Core Capital (0.10)
March 31, 2009 and banks that ceased to exist in India (b) Capital Adequacy (0.15)
during 2008-2009; were not considered for the rankings. (c) Borrowings/Deposit Ratio (0.15)
2. Financial information for the year ending March (d) Liquidity (0.20)
31, 2009 relating to each of the banks falling into the (e) Total Assets (0.20)
aforesaid categories was collected from the data avail- (f) Networth (0.20)
able from the Reserve Bank of India. To ensure consis- The rationale for selecting each of the sub-criteria
tency, only the published information was used. and assignment of their respective weights is dis-
3. Five different major criteria were identified cussed in above-mentioned article.
against which the Indian banks were to be ranked. 5. Banks were ranked, category-wise, within each of
These criteria are: (i) Efficiency, (ii) Profitability, (iii) the aforesaid sub-criteria. These sub-criteria ranks
Growth, (iv) Credit Quality, and (v) Strength and were multiplied with sub-criteria weights and the
Soundness. Considering the current banking, industri- weighted sub-criteria ranks were carried over to each
al and over-all economic scenario, pertinent weights of the major criteria. The sub-criteria ranks were then
were assigned to each of the major criterion. The multiplied by the major-criteria weights. The resultant
rationale for selecting each of the criteria and assign- weighted major-criteria ranks were aggregated to
ment of their respective weights is discussed in the determine the best bank in each of the four categories
above-mentioned article. and each of the five criteria.
4. Six sub-criterion were selected within each of the 6. As discussed in the abovementioned article, since
aforesaid major criteria, which would cover the vari- all the banks, irrespective of their ownership (catego-
ous aspects within the aforesaid criteria. Considering ry), compete in the same market place, vie for the same
the current banking, industrial and over-all economic customers and are faced with the same situation, it
scenario, pertinent weights were assigned to each of was deemed appropriate to determine a best bank
the sub-criterion. These sub-criteria and their respec- within each of the major-criteria selected by us. Here
tive weights (in brackets) are: the same aforesaid process was followed, but the banks
(i) Efficiency (0.15) were not spilt into their respective categories.
(a) Non-Interest Income/Total Assets (0.10) 7. While ranking banks of the aforesaid 30 parame-
(b) Business per Employee (0.15) ters, it is found that banks with total assets of less
(c) Profit per Branch (0.15) than Rs 5,000 crore compare favourably against larger
(d) Operating Expenses/Total Assets (0.15) banks. These are primarily foreign banks that operate
(e) Profit per Employee (0.20) in India in a very limited manner. Including these
(f) Spread/Total Assets (0.25) banks often distort the results and thereby, render the
(ii) Profitability (0.20) ranking less meaningful. Accordingly, banks with total
(a) Yield on Advances (0.10) assets less than Rs 5,000 crore have been excluded.
(b) Return on Investments (0.10) 8. Also excluded are banks that merged their opera-
(c) Return on Assets (0.20) tions with other banks during 2008-09, e.g., pursuant to
(d) Cost of Deposits (0.20) the merger of State Bank of Saurashtra with State Bank
(e) Return on Networth (0.20) of India, the parameters of the merged entity are taken
(f) Cost/Income Ratio (0.20) for 2009, whereas the parameters of erstwhile State Bank
(iii) Growth (0.20) of Saurashtra have been disregarded for 2009.
(a) Total Assets Growth (0.10)
(b) Net Interest Income (‘NII’) Growth (0.10) Team Ernst &Young: Viren H Mehta, Husain Diwan,
(c) Increase in Networth (0.10) Tanvi Vedak, Surendrakumar Mundra, Karan Shah
(d) Advances Growth (0.20) and Vikas Kabra
Aditya Puri, MD&CEO, HDFC Bank Banks been raising deposit rates?
What is your view?
a significant role’
and urban branches would be urged to
concentrate on current accounts.
Corporates would be approached for
canvassing salaried accounts with a
bouquet of services leveraging the
G Nagamal Reddy, MD & CEO, areas for growth. The speed in fullest use of technology: anywhere
Tamilnad Mercantile Bank speaks delivering corporate and retail credit banking, RTGS, NEFT, debit card, net
with Sajan Kumar of the Financial is another areas the bank has planned banking, e-payment etc.
Express about being a small bank with to concentrate on. The bank has also
more regional flavour, where TMB entered into a MoU with CRISIL for How is the year shaping up?
stands in the changing atmosphere, the rating SME borrowers. A thorough understanding of the
controversy over the ownership issue of prevailing market and customers’
the bank and other things. Excerpts: How are you planning to improve changing requirements, expectations
your net interest margins? and the efforts taken by employees at
Being a small bank with a more The bank witnessed a net interest all levels to meet the expectations of
regional flavour, what kind of margin of 3.55% as on February 28, customers, as well as the preparation
business focus do you have in 2010, which is due to the increased to expand the revenue streams for
terms of retail and corporate? focus on building low cost liabilities sustainable growth, would work well
Small-sized banks contribute and high yielding assets in SME and for building a new brand image and
significantly to the total market share retail sectors. health for the bank.
of scheduled commercial banks. Our CASA has improved by 19% when The various initiatives taken by the
regional presence and sense of compared to the previous year ended bank to improve the fee-based income
belonging have given us a prime March 31, 2009. The credit to the retail will boost the bottom line of the bank
position. sector has also grown by 24%. The net in the current year. Due to the focus on
TMB is concentrating on building profit of the bank has improved by building a higher level of efficiency
safer and more remunerative assets. 16% up to February 2010. The full and strengthening the margin by
Our strategy is to focus on corporate results of various initiatives are cutting the proportion of high cost
and retail business, which would fetch expected to reflect in the bank’s deposits and the size of low yielding
a mix of quality and high yielding current year balance sheet. assets, the bank added 1,86,000 new
assets. Our incremental CD ratio over customers. The bank is harnessing its
March 2009 works out to 136%, which How difficult is for you to raise low strength of technology. Customers
shows our aggressive growth in cost deposits since you don’t have expect a major change in our bank
advances. Plans are on to open much of a branch network? both in terms of capital structure and
specialised branches at metros to take As the spread started thinning services,
focussed care of the credit from 3.53% in the year 2008 to 3.37% in
requirements of corporate the year 2009, the bank decided to Has the controversy over the
establishments. The bank already has improve the CASA component, which ownership issue been settled?
a lending portfolio of 37% to will help in bringing down the cost of Since the new board is in place and
corporate credit. The bank has deposits. The necessity of enhancing the pending AGMs for the years 2008-
already built a retail asset portfolio of the CASA deposits to improve the 2009 have also been held, I feel that the
63%. The bank has 24 retail schemes bottom line of the bank percolated ownership issue is resolved by the
in the market and four or five down to the people in the branch level competent court. With enhancement
schemes, including home, education, and permeated the organisation. in the level of corporate governance
car and SME credit. CASA has become the mantra of the after holding the AGMs and stability
In the retail segment, the bank bank. As the bank has 216 branches in its operations and consistency in
finds huge opportunities and the across the country, the mantra of earnings, the bank will be able to
delinquency rate is considerably less CASA was echoed in 12 states and in provide better value addition to its
due to its cautious approach. We the hearts of 2,250 TMBians. As a stake holders.
believe that through identifying result, the bank was able to mobilise Efforts will be made to make the
credit-worthy retail proposals, the Rs 402 crore of CASA deposits, an bank more dynamic, in the sense that
bank can expand its retail credit increase of 19% growth over March it will be adjudged not only as the best
without being aggressive. The bank 2009, which works out to 24% of the bank but also the fastest growing
identified retail as one of the strategic total deposits with the existing bank under each parameter. ◆
‘We will cater with only covers Indian funds that are
dedicated to investing in India or
emerging markets that are investing
in India but also global funds who can
‘Financial inclusion
plans are profitable’
Romesh Sobti, MD & CEO, Indus- network?
Ind Bank, speaks with Saikat Das of We have plans to open 120-150 more
the Financial Express regarding the branches by March, 2011 adding to our
bank’s growth, its risk management existing 210 branches across India.
practices and its hiring plans, among For half of these new branches we
other things. Excerpts: don’t need RBI’s approval. The latest
regulations have given banks the
What kind of growth have you freedom to open branches in the tier
witnessed in your business? III and tier IV centres with population
We have a total balance sheet of below 50,000 without seeking
Rs 33,000 crore, wherein advances are permission from the Central Bank.
Rs 19,000 crore. We will probably end We are focussed on the north, west
up with a 27-28% loan growth by and south. We have a presence in the
March, 2010. We are expecting a credit North East as well.
growth of 25-30% in FY2011. Our
credit growth will be evenly Are operations in remote places
distributed across corporate and profitable?
consumer lending, including vehicle It can be profitable. If you treat
financing. While 60% of our loan book financial inclusion as an obligation to
is corporate, 40% is retail. Under the be met at the end of the year, then it is
retail part, we finance 40,000 vehicles a loss making proposition. But if you
every month, including two/three work on it through out the year as a
wheelers, commercial vehicles and business plan, it can be profitable.
off-the-road construction vehicles. Financial inclusion, unless it is
We have a wide distribution embedded in business, is a loss-
network and inherited this structure making proposition. We are strong in
from the merger of Ashok Leyland the area of micro financing. We give a
Finance. We are small in the home and lot of three wheeler loans in rural
commercial vehicle segments. areas. We provide loans to village
women through micro-financing
How focussed is the bank on risk schemes. We have zero delinquencies.
management practices?
All areas of risks, including credit What are the bank’s hiring plans?
risk, operational risk and market risk We have always remained robust in
must be well-managed. The growth hiring. In 2008-09, we hired 1,500
under IndusInd comes under the risk people. In 2009-2010, we hired 900
management umbrella. people. By the end of the next fiscal,
You must have the infrastructure to we plan to hire 700 people for branch
manage risks and to support your banking and 900 in the area of
growth. consumer banking (sales operations
I have seen many financial and risk management).
Tsunamis like this in my 35-year Most of our hiring is done through
career. The lessons from this boils "Indus Parichay" (our own
down to the fact that if you are recruitment scheme), employee
running a growth organisation, first reference programme and through
put up the risk management pillars: head hunters, which constituted 12%
market risk and operational risk. Risk of total recruitment the last time.
management has to be harsh. For our consumer banking we will
hire more. We call it ‘feet on street’,
Are you expanding your branch under which we recruit sales people. ◆
Capital Core
Rank Adequacy Capital Liquidity
2009 Name % Ranks % Ranks Rs Lakhs Ranks