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| INDIAN OVERSEAS BANK | |||||||
| Exciting
and Challenging |
Interview with T. S. Narayanasami, CMD, Indian Overseas Bank | ||||||
What is your assessment
of the current situation in the Banking Industry in India?
An exciting and a challenging phase.
Exciting because the Barriers of nation and transnational banking is
vanishing. For a financial institution, which is responsive to client
needs, virtually there will be no limiting factors. Challenging because
it needs for intensive reeducation in terms of updating knowledge,
acquisition of new skills and above all, change in the mindset.
How do you view the Indian Banking sector’s significant progress since nationalisation? Nothing short of phenomenal. Not
specifically in terms of numbers of branches alone or explosion in
terms of the penetration into rural segments. But, also referring to
the multifarious functions, which have been assigned to the banking
system, especially the public sector banks and how they have mastered
the new responsibilities. Yet another spectacular change has been in
terms of the introduction of technology, especially in the last decade.
Where does Indian Banking sector stand compared to the international banking sector? Any comparison is risky. Comparisons
have to be done between units operating under a level playing field.
Having said that we should appreciate the Indian Banking sector that
has acquitted itself reasonably well. Our market share has not crumbled
even after many of our foreign counterparts started operating in our
soil. On the contrary, they are being given a run for their money even
by the “so-called-conservative” Indian Banker.
What are the key issues facing banking sector today?
Mostly on the lines of the answer to
Question No. 4.
How do you look at the future of the banking sector in India? Bright. However, it depends on how we
tackle the issues outlined in the answer to question no. 1. There is
also a distinct possibility of a shake-out resulting in greater
consolidation, especially among strong and strong banks.
What will be the future strategy of Indian Overseas Bank? We have initiated certain Organisational
development interventions, which have helped us exhibit a growth of 42%
in the last 18 months:
Each of these steps has given us the
dividends we hoped for. We will be looking at more such initiatives.
Before the year-end, we shall be acquiring Bharat Overseas Bank Limited
into our fold. In fact, it will be a homecoming as this bank is
historically an offspring of IOB.
What would you advise your customer to the best way to manage money? The key strategy has to be a trade off
between liquidity and long-term growth. Depending on the financial
position, need and risk appetite, each of us have to align the
investment. Savings balance for cash requirements, fixed deposits for
wealth accretion/hedge against inflation depending on the savable
resources. Sufficient insurance to take care of your family. Mutual
funds and precious metals for people with higher risk appetite.
What are you doing about improvement of service of Indian Overseas Bank? We are tackling this vital issue from
various dimensions:
How do you see the Banking Industry in 2010? A difficult question, even for a
futurologist. However, certain broad patterns are evident. India will
have lesser number of larger banks: Branch banking will become mostly
redundant, as 95% of the transactions will be done through electronic
channels. Banks will be financial supermarkets where a person can order
and receive his choice of financial products.
Priority Sector credit targets have not been met in many cases. What is the reason behind it? As far as our IOB is concerned, we have
consistently delivered on social commitments. We go much beyond the
numbers required and imbibe the spirit of the governmental directives.
As far as banks, which trails behind the goals are concerned, a
limiting factor could be their branch network, lesser representation in
rural and semi-urban areas.
What about the recent activities of Indian Overseas Bank? Covered under the earlier questions no.
7 and 9.
Any comments on the Government Policy? The policy initiatives have been
fine-tuned to be pro-active, to tackle problems, even as they are
emerging. Governments at State and Central levels have been transparent
and they have taken bankers into confidence as to the reasons behind
the initiatives and guidelines.
Have you any observations on other issues? Nothing specific.
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