MANGALURU: Despite the disruption caused by Covid 19, private sector lender Karnataka Bank has been able to maintain stable performance with its ‘Hold, Consolidate and Emerge Stronger’ business strategy by paying rich dividends, Chief Executive Officer said and Managing Director Mahabaleshwara MS, in an exclusive interview. While the government has taken several measures to revive the dying economy, other measures such as the Quick Repayment Incentive Facility, which is available to farmers, should also be put in place for other sectors, adds. he does. Extracts:
Karnataka Bank surprised by posting 12.23% year-over-year growth in net income for the six-month period ended September 2020. How did you manage it?
A very holistic approach aimed at minimizing costs, increasing revenues and improving operational efficiency has contributed to sustainable and significant growth in net profit. Our new business strategy, “Conserve, Consolidate and Emerge Stronger”, designed for the year affected by the Covid-19 pandemic, is also paying rich dividends. We put a lot of emphasis on the Single Settlement (OTS) route for bad debt collection and were surprised to see defaulters come forward for settlement despite the challenges. Recovery was much better for the NPA and technically written off accounts.
Do you think the Centre’s recent announcements on interest relief and the loan moratorium will boost consumer confidence? What other measures do you think are necessary for economic recovery?
Measures such as the EMI moratorium, the One-Time Restructuring (OTR), the Emergency Line of Credit Guarantee Program (ECLGS) and the waiver of compound interest – all of these together will ultimately contribute to economic recovery.
In addition, I would look forward to any kind of support for those who contribute significantly to the economy. In the agricultural sector, there is an incentive mechanism for rapid reimbursement. We should have a system in which prompt reimbursement in all sectors is encouraged. Bankers, the regulator and the government should collectively develop specific sectoral packages for the recovery of the economy.
Under the MSME emergency credit program, how much loan did you provide between March and September?
ECLGS was one of the new programs implemented on a limited time basis whereby we provided loans worth around Rs 1,800 crore. The program acted as an emergency lifeline for MSMEs to overcome the financial crisis caused by the pandemic and the lockdowns that followed. Our loan to the MSME sector also increased by 15% during the Covid-19 pandemic, far more than retail advances which stood at 8%. For us, MSMEs are the top priority because the sector is the biggest generator of jobs.
Did you say your bank started reaping the profits from KBL-Vikaas? Can you please clarify?
KBL-Vikaas is a holistic, holistic, technology-driven transformation. Customers who visit banks for day-to-day banking activities have decreased significantly as evidenced by the increase in our digital transaction to 88.36%. Now we also digitally issue principle sanction orders for home, auto and MSME loans. Previously, what took around 30-40 days now happens in as little as 30-40 minutes.
Where do you see the Indian banking sector in ten years?
The next ten years will see technology driving the banking industry. Adaptability is well present in the DNA of Indian banks.
Besides strengthening the internal system and increasing the capital, the consolidation of public sector banks will also help us to build a stronger financial sector in the coming years.