We don't want sarkari culture in our bank: Kishor Kharat, CEO, Indian Bank

On Indian Bank making a profit amid the banking gloom

This bank was in trouble in the mid-1990s. The government rescued it by infusing capital, and we survived. From then, our approach has remained conservative. We have the lowest non-performing assets (NPA) in the industry because we did not lend carelessly. While many banks were caught in problematic sectors such as road, power, cement, textiles, etc, we were better off as our exposure to those sectors was very low. Hence we could make a decent profit. 

On competition with private banks

We are raising our bar now. We will now aggressively compete with private banks. We don’t want a sarkari culture in our bank. We are increasing our level of services and efficiency to the level of a good private bank. Analysts have already started saying how Indian Bank is becoming a public sector bank with private sector characteristics. In the past one year, the look and feel of our corporate office has changed. We are changing the environment at our branches, too. There are private banks like HDFC bank, ICICI bank and Axis Bank that have large balance sheets and, hence, are not comparable with us. But we can surely compete with those having a similar size. We want to take on banks like Kotak Mahindra Bank, IndusInd Bank, Yes Bank, etc. Their businesses are growing over 20% (Yes Bank’s business, for example, grew over 46%, against Indian Bank’s 17% in FY18). If a bank like us, with good financial health, doesn’t aspire to catch up with private banks, who will do it? 

On bankers’ fear of being investigated at a later stage

Yes, this continues to be a concern. As bankers, we take decisions on the basis of today’s circumstances. The situation may change in 4-5 years. None of the bankers, for example, could anticipate the cancellation of coal blocks or the 2G telecom spectrum licences. The banking industry is such that there will be some deviation from rules on a case-to-case basis. So, if there is any deviation, it must be justified and recorded. But who knows, an investigator at a later date may say ‘we don’t accept that justification’. 

On the lessons learnt from diamond merchant Nirav Modi’s bank scam

This fraud has exposed some of the flaws in India’s banking system. More checks and balances are needed. All transactions must reflect on the books. And more so, people executing transactions and those checking these need to be different. 

Source- Economic Times