The Hindu Business Line : Canara Bank to have over 3,000 branches by March

Coimbatore, Oct. 4 Canara Bank envisions joining the “big league” by March 2010, when it would have an estimated 3,000-plus branches across the country, the Executive Director, Mr H.S. Upendra Kamath, said.

The bank has licences to open 200 branches during the current fiscal, including the licences of 20 branches pertaining to last year. It has brought 1,290 branches under core banking and plans to cover 1,600 within two months.

On overseas presence, he said: “We will be opening a branch at Lester in the UK and a Representative Office in Sharjah very soon. We have three overseas branches at London, Hong Kong and Shanghai and a joint venture with State Bank of India in Moscow. We also have the licence from the RBI to open offices in eight to nine centres, but we prefer to wait for now because of the global turmoil.”

The bank is targeting a business volume of Rs 4 lakh crore this fiscal.

“Provisional estimates show that we have achieved Rs 3.50 lakh crore up to end-September, with deposits at Rs 2.04 lakh crore and advances at Rs 1.46 lakh crore,” he said.

He told Business Line that the bank has restructured Rs 5,200-crore advances involving 92,000 accounts (including exporters’ accounts).

“We extended the loan tenure and gave interest concessions to help customers tide over difficult times. Interest concession was offered after taking into account cash flows and cash accruals. A lion’s share of the Rs 5,200-crore advances is still in standard category. Therefore, we did not have to make a provision for downgrading of accounts. Only for extension of tenure, we had to calculate and make a provision of Rs 88 crore, which is not much.”

He conceded that banks did not do well during the first quarter of the fiscal. “But the provisional Q2 figures show a 22 per cent growth in credit year-on-year. This quarter is expected to be better.”

Help for Exporters

Asked what the bank proposed to do for the exporters, Mr Kamath said: “We have met most of their demands. Interest rate is anyway regulated. But yes, there is scope for product innovation. The one-size-fits-all kind of product will not suit today’s market. We have to evolve cluster-based products and these have to be location specific, industry specific and so on.”

While the bank would look at evolving products to cater to the specific requirements of its customers, Mr Kamath hinted at the need for some of these units to look inward. “They should strive to bring down inventory cost, adopt newer technologies, shed excess flab, penetrate newer markets and innovate,” he said.

Recruitment & Succession

“We did not go to the campuses, but recruited clerical staff, officers, marketing officers for selling third-party products, lawyers, chartered and cost accountants – in limited numbers.

“While attrition and retirement is part of the cycle, Canara Bank has evolved a satisfactory succession plan at the senior level. We identify the core strength of these youth and groom them accordingly. The board has approved our succession policy. It is a combination of training, grooming and lateral recruitment,” Mr Kamath added.