Have your recent results set a new benchmark?
That’s right. Not only in annual net profit, we crossed Rs 100 crore in net profit in each individual quarter in the last financial year. Our fundamentals have also shown positive traction as NIM for the year was 3.18%, CRAR was 15.66%, PCR was 73.47% and our CASA was 32.97% while our NPAs declined. A series of strategies that we adopted as part of our transformation journey KBL-Vikas

The Consultative Group (BCG) as our advisor acted as an enabler to achieve this. In fact, now we are in the process of implementation of KBL-Vikas 2.0 and working towards KBL NXT initiative.

How are you preparing your bank to remain competitive as it turns 100 next year?
We entered BCG four years back with this objective of making Karnataka Bank Limited (KBL) the next generation bank till it enters its next century. We contacted all of our employees, explained the opportunities ahead, and made each a change agent in one visit to the bank.

We first identified areas to advance change, such as human resources, technology and customer experience, and successfully completed the task. Our entire KBL staff has been replaced today as the Sales and Marketing team.

How far are you taking technology deployment?
We a. We are transforming ourselves into a new era bank with banking Culture is more focused on marketing and sales. With technology, we are now at par with any new age bank. we are one of the few banks Digital underwriting of retail loans.

We have established a Digital Center of Excellence in Bengaluru to develop digital innovations and technological value-addition. We have also identified some key areas to take forward in our transformation journey under KBL-Vikas 2.0.

We will have an end-to-end digital solution for all aspects of banking, not only customer-oriented, but internal as well. For example, we have introduced round-the-clock surveillance (Alfrs) to prevent fraud, which has helped build trust among the users of the digital banking platform. We are also planning to open a representative office in UAE to expand our reach abroad.

What has been customer response to your technology interface initiatives?
Data shows that customers are increasingly accepting of our digital experience. What was around 32% about 10 years ago, 93% of the day-to-day transactions happen in digital format today. At the second level, this increased use of technology has resulted in cost savings and better efficiency for the bank. For customers, it is a part of digital empowerment as their comfort and satisfaction levels increase along with ease of banking.

What are the new areas for development?
RBI has listed Karnataka Bank as Agency Bank, from which we are able to handle Government Businesses. This gives us a great cross-selling opportunity along with growing Casa. This segment is set to grow as we tap other state governments and central government bodies. On the lending side, co-lending is on the rise and we will all continue to explore new pastures.

What is the potential impact of inflation on your business?
This is an area that we are cautious about. Our progress is increasing at a healthy clip. We see that grassroots economic activity is picking up. While doing business even during COVID-19, we have never lost sight of our long term goals. With a firm focus on the quality of our assets, we reach out to our customers and support them in their times of difficulty. We will continue to evaluate the evolving situation and focus on healthy growth in interest-generating assets.

Older private sector banks like yours are getting caught between the new age private banks and business-killing fintechs. What do you need to do to gain market share and customers?
I think fintech and other financial start-ups are not a threat to banks. Instead, they are business promoters for the banking sector and play a complementary role. We have tied up with many fintechs to accelerate business and explore a new area of ​​banking like neobanking etc., and a right collaboration between fintech and banks will surely be a win-win game for both.

\ Even though we have a time-tested universal bank in the private sector, we adapt rapidly to changing conditions. Today, our Digi approval under eligible retail loan restrictions is at par with the new age private sector banks. In the case of the salaried class personal loan segment, it stands at 100%.

We are now well on the way to gain market share. We are on a mission mode to on-board all types of New-to-Bank (NTB) customers with a special focus on Millennials. Our Mobile Banking App, ‘KBL Mobile Plus’ is customer friendly and popular. Through this app the customer can do most of his banking activities round the clock.

You got record high profits last year. But your share price is where it was a decade ago. What is the bank doing to acquire interested investors?
A combination of factors, including sentiment, influence stock price movements, not just financial performance. We are still largely a bank of retail shareholders. I am optimistic that our stock trading will gain traction going forward, as will the share price. However, the book value of the stock has been increasing steadily. In fact, in a decade it increased from Rs 137.99 to Rs 227.83 till March 31, 2022.

You said your best is yet to come on the NIM front? What are you doing to improve that number?
Our NIM has been improving over the years. It was at 3.18% in March 2021 from 2.91% in March 2021 with a growth of 27 bps in FY 2022. With many supporters like continuous improvement in CASA, lower cost of funds, healthy spread, improvement in asset quality, healthy credit growth, lower credit cost, overall improvement in efficiency etc., I believe that NIM will further improve ready for.

How is Karnataka Bank tackling this challenge of stiff competition in the banking sector, chasing small and medium corporate and retail?
Competition has intensified after the area was opened to new players. Digital capabilities, customer service and customer loyalty have been our hallmarks. We have registered decent growth in the retail and mid-corporate segments. The minimum turn-around-time for loan approval attracts customers to our bank. This year also, we will continue to focus on agriculture and mid-corporate sectors as well as retail and MSMEs. We have a robust credit monitoring system which ensures quick collection of dues on or before the due date and hence, going forward, I expect a steady growth.