Lending Consumers a Hand

Shanti Ekambaram, 54, is in the thick of things. The merger of Kotak Mahindra Bank with ING Vysya Bank this year has doubled its network to 1,362 branches. This is a great opportunity to cross-sell products and enter South India, where ING Vysya was strong. Also, the launch of the "811" service has given the bank the first-mover advantage in garnering small savings accounts. "The 811 service is giving the physical system a run for its money," says Ekambaram. "Digital banking teaches bankers to think differently," she says.

The bank, under her, is betting heavily on uptick in urban consumption. "There are aspirational and lifestyle factors. The current generation has a propensity to spend as well as borrow," says Ekambaram. Retail banking, in any case, has been a saviour for many banks at a time when credit growth is at historically low levels. This is because it is a space that has been vacated by foreign banks due to global woes. For a bank such as Kotak, with a digital focus, the market is wide open, something that Ekambaram is using to the hilt. The share of retail banking, already at 40 per cent of total advances, is growing. The merger with ING Vysya is taking the process even further. "We are ready with integration of people, branches, system and culture," says Ekambaram, who is, at the same time, not keeping her eyes off low-cost deposits that are so necessary if the bank has to keep lending at lower rates and sustain consumer interest.

While the bank's CASA (current and savings account) ratio is a comfortable 44 per cent, it is making every effort to take it higher. "Liabilities (deposits) are our assets," says Ekamabram. The bank is already paying a higher rate of 6 per cent on savings deposits as against 3.5-4 per cent being offered by well-established banks.

Ekambaram also wants to offer many products online to expand reach. "We get close to 25 per cent incremental personal loans digitally. The share of credit cards is 10-15 per cent," she says.