From its humble beginnings in 1924 when it was incorporated at Mangalore, Karnataka Bank Limited has today become one of India's premier private sector banks. With a presence in 18 States and two Union Territories, the Bank employs over 4,300 employees, has 97,617 shareholders and serves over 25 lakh customers. According to Karnataka Bank's chairman and managing director Ananthakrishna, the bank is in the "forefront of providing professional banking services and quality customer service". Excerpts from an interview Ananthakrishna gave Ravi Sharma:
What are Karnataka Bank's strategies to take on the increasing competition in the banking industry?
Karnataka Bank, which has nearly eight decades of useful existence and strong financials, has been facing the heat of competition and keeping up with the challenges of emerging technologies and trends. The bank gives the customer the pride of place, offering him customer-friendly products and techniques. Technology-based products and services with a human touch are the distinctive factors that have enabled the bank to face the competition more effectively.
What short-term and long-term plans is the bank contemplating both in the traditional and non-fund-based areas?
The bank aims at sustainable organic growth in which there is little difference between short-term and long-term plans. Increasing the customer base with technological and geographical reach will enable us to achieve our goals.
Although the cost of funds has come down, credit offtake is sluggish. What are the new avenues for the bank?
It would be incorrect to presume that the credit offtake is sluggish in the banking industry. In fact, the rate of credit growth is more than the rate of deposit growth. As far as our bank is concerned, there is considerable spurt in credit off take. The retail and small and medium enterprises segments are the key areas of growth. The bank is focusing on these two sectors.
Is the bank planning to introduce any new technology initiatives?
In fact, Karnataka Bank is the pioneer in adopting the core-banking solution (software) `FINACLE', designed and developed by Information Technology major Infosys Technologies Limited.
The bank has also already introduced a slew of technology-driven products such as `MultiCity' cheque facility, which is payable at 200 of our branches in 90 centres across the country. The bank has also launched the `Anywhere Anytime' banking facility at over 280 branches for the benefit of our customers. Further, the bank's Moneyplant International Card, which is issued free of cost to savings bank and current account holders, helps safe and secure transactions at a network of over 5,300 ATMs of 16 banks. Plans are also under way to launch Internet banking. Karnataka Bank is also going to introduce demat services, mutual funds and so on.
What levels of business does the bank hope to achieve in the coming financial year?
The bank has projected a business turnover of Rs.20,000 crores with Rs.12,500 crores deposits and Rs.7,500 crores advances for fiscal 2005-06.
How many branches and ATMs does the bank currently have? Are there any plans to open more?
At present the number of branches is 386. Plans are afoot to increase the number to 400 by the end of the current financial year. The bank has 50 ATMs of its own, a number which will be increased to 100 by the end of the year.