Bank of india may go for a qip in 2nd half: vijayalakshmi iyer

From renewed strategies to spirited efforts, she opens up in the first-ever. Just six months at the helm, VIJAYALAKSHMI IYER, chairperson and managing director, Bank of India, is pulling out

all the stops to put state-owned lender Bank of India back on growth track. From renewed strategies to spirited efforts, she opens up in the first-ever interview given to any media house

after taking over, with Megha Mandavia and Parnika Sokhi. Edited excerpts: WHAT ARE THE TOP THREE OBJECTIVES ON YOUR AGENDA? My reading prior to joining the bank and my observations during

my incognito visits to the offices and branches revealed that the priority is to improve margin and profitability by bringing down the international credit-deposit ratio to below 110% from

118% and increasing it domestically from 68% to around 74% level. We aim to increase domestic net interest margin by 15 bps. Next, the power given to our zonal heads and branch managers is

very less. Investments can happen anywhere across the country. I felt that we should not restrict mid and large corporate business to just 50 branches. Finally, the third challenge is to

reduce slippages and improve asset quality. Are you replacing bulk deposits? Since credit pick-up was slow this year, we have shed Rs34,000 crore of bulk deposits after I took over. We have

not replaced them and as per the government directive, we are below 15% from 20% earlier. How are you planning to boost current account and savings account (CASA) growth? This year, we are

making a concerted plan rather than just passing on the whip down the line from CMD’s office to the branch manager to improve CASA. We are identifying centres, potential branches in each

zone. Typically, top 20% of the branches contribute 80% of savings and current account deposits. We are also identifying colleges, hospitals, government departments to see whether we are

there or not. We are also trying to get salary accounts of companies which are there with private banks. It is a question of perception. The public believes private banks are more efficient.

Somehow, PSBs haven’t been able to sell themselves. Today, you have to be a good salesperson also. Are you launching new savings products? We are in the process of that. I have set up a

separate laboratory for product research. How do you plan to improve asset quality? Risk is very dynamic. Whatever risk we take, over time we should know how to mitigate it. Most bankers

don’t do that, they step in only when the first signs of distress are visible. Until then, risk has crystallised. We should be careful when payments start getting delayed. That is what I’m

trying to strengthen here. At that stage, borrowers are willing to give more collateral. But we tend to be more complacent there. Most of the concerns on asset quality should have abated by

now. Banks have taken care of big-ticket loans that needed restructuring. It should start falling from June onwards. The bank’s tier-I needs a boost. Any fund-raising plans this year? We

have asked about Rs2,000 crore for the current financial year. We may go for a qualified institutional placement (QIP) issue in the second half, depending on what the government decides to

inject. What are business growth targets this year? How do you plan to achieve them? We expect credit and deposit to grow 18-20% this year. We are defining the service level for every

customer-facing activity, whether it’s asset or liability. I visited 20 zones and plan to cover the remaining 30 in future. Earlier, the credit disbursal time used to be 4 months for

corporate loans, now it is down to 45-60 days. I want to bring it to 30 days. For retail loans, the disbursal time is down to one week from 4-6 weeks. We have enabled online applications for

retail loans last month. I want to start it in SME, mid and large corporate loans by June this year.