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|ORIENTAL BANK OF COMMERCE|
Class Banking to Mass Banking
||Interview with K. N. Prithviraj, CMD, Oriental Bank of Commerce|
What is your assessment of the current situation in the banking industry in India?
The banking sector has been doing extremely well over the years and has been playing a catalytic role in the economic development of the country. Over the years, ratio of deposits and advances to GDP has improved from 38% and 27%, respectively in 1991 to 66% and 47%, respectively as at end-March 2006.
How do you view the Indian banking sector’s significant progress since nationalisation?
Since nationalisation of banks, class banking has given way to mass banking, keeping the social objective in mind. As a result, the number of people being served by a bank branch has steadily declined from 65,000 in 1969 to 15,000 in 2006.
Where does Indian banking sector stand compared to international banking sector?
As of date, even the combined balance sheet of all banks in India is less than the individual balance sheet of top 10 banks of the world.
What are the key issues facing banking sector today?
Some of the issues that banking sector is facing today includes compliance to Basel II norms, spread management, consolidation, pricing & customisation of products – both assets and liabilities, rural and priority sector banking etc.
Which are the thrust areas for banking sector in India?
Since agriculture sector has to play an important role for sustaining the GDP growth at around 8%, banking sector has to accord priority to this vital sector of the economy. Other areas include SSI/SME, infrastructure, housing etc.
How do you look at the future of Indian banking sector?
Future of banking sector shall be very challenging one, as there shall be a fierce competition among banks. We shall see a spate of consolidation and some bigger banks with operations outside shall be of international character while some other shall don the mantle of nationalised character. In a nutshell, we shall find a few number of big banks in the time to come.
What will be the future strategy of Oriental Bank of Commerce?
Oriental Bank of Commerce has recently crossed the Rs. 1 lakh crore business-figures and is aiming at Rs. 2 lakh crore of business by March 2010. Our thrust areas would be procuring cost-effective deposits, retail credit, priority sector lending including agriculture, SSI, SME and infrastructure etc.
What would you advise your customer to be the best way to manage money?
As of now, the rates offered by banks are very attractive vis-à-vis other instruments and offer security and liquidity. In view of this, it is advised that customers keep a bigger proportion of their money with the banks to maximize their returns.
What are you doing about improvement of the service of Oriental Bank of Commerce?
Oriental Bank of Commerce is a customer-friendly bank and we are investing both in technology and human-ware in order to further improve the level of customer service in the Bank. In this direction, we have brought more than 1,000 branches working under the ambit of CBS environment. Over 93% of banks’ business is being captured by CBS platform and all these branches offer Anywhere Branch Banking, Multicity Cheques, RTGS, CMS, Internet Banking, Telebanking and a host of other value added services to its customers. The Bank has operationalised 600 ATMs, working on MITR/NFS/OIC Alliance network. In addition, customers of the bank have access to more than 8000 ATMs of member banks.
How do you see the banking industry in the year 2010?
As per the Vision Document 2010 of the IBA, banking sector in India will witness a phenomenon change. There will be consolidation of Indian banks, more number of foreign banks, greater technology infusion, greater pool of specialised personnel etc.
Priority sector credit targets have not been met in many cases - what is the reason behind it?
It is true that some of the banks could not achieve priority sector credit targets, in general, and to agricultural sector in particular. To this effect, revised guidelines of RBI shall take care of the technicalities involved in achieving the priority sector credit target. Overall, the flow of credit to the priority sector shall continue to be on the top of the agenda of the bank.
What about recent activities of Oriental Bank of Commerce?
Oriental Bank of Commerce has signed a MoU with two other nationalised banks – Corporation Bank and Indian Bank for sharing of resources in order to increase profitability and reducing expenditures. OBC is already marketing life and non-life policies of LIC and OIC, respectively. In addition, we are the corporate agent of Franklin Templeton for setting their mutual funds products. We have also entered into an agreement with India Infrastructure Finance Company Limited (IIFCL) for financing infrastructure projects.
Any comments on government policy?
The Government of India has been receptive to the changed economic environment and has been creating enabling environment by framing suitable policies in order to achieve socio-economic objectives in the largest interest of the people.
Have you any observation on any other issues?
Observations are issue-based.
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