RBL Bank did face minor challenges in some rural pockets due to lack of currency post demonetisation, says Head of Strategy Rajeev Ahuja. However, he is quick to add that the impact of demonetisation has not been as severe as it was anticipated to be.
RBL has not had any liquidity challenges, collections have been healthy and so far there has been no significant change in delinquencies, he says.
However, he does agree that November loan growth may get impacted slightly.
Considering the sudden move to demonetise, the bank has advanced its plans on digitisation by 18-24 months, he says.
Below is the verbatim transcript of Rajeev Ahuja's interview to Latha Venkatesh & Sonia Shenoy on CNBC-TV18.
Latha: We have normally started with everyone from the liability side asking them how much money did you make from the deposits but let me start from the asset side, how has repayment been, any trouble?
A: So far the ground check is fairly okay. There were some challenges in the smaller sectors - rural, where the lack of currency caused some amount of dislocation. I do not think it is as bad as we would think given the scale of this entire exercise. So we are seeing healthy collections.
Obviously we have to watch on a day to day basis because some of the November effect is still sipping in. We also believe that the currency availability will come back and also the level of economic activity which people feared in terms of dropping off a cliff, it's probably not going to be the case and I was listing to your previous guest and the Maruti Suzuki numbers, I do not think it will be as dire as some of the immediate forecast have made it out to be, but yes, we are being careful, we are being watchful and we are working with our clients who perhaps need some temporary help to tide over the next 30-45 days so that business models and business strategies are maintained and we get out of this short-term challenges on liquidity and transaction currency in a fairly robust manner.
Sonia: Do you see, in the very near term, higher amount of delinquencies on loans that you have lent to customers in the northern region where you have a high amount of exposure?
A: I do not think we are seeing that yet. I think most parts of India will get impacted but I do not think the impact is as severe and deep as people expected it to be in the initial days when there was a lot of confusion around what it is going to be, how cash is going to come back, what are we going to do in terms of purchase and sales. So we do see some delays but these are not things which can be endemic or become really long-term issue. I think client groups, depending on who you work with and most of our clients are actually people who were believed would actually prefer to work in an environment where there is a lot more disclosure, a lot more use of formal channels of banking, are going to ride this out, hopefully much stronger and our job is to continue helping them manage this process of transition in as less in inconvenient manner as possible.
For entire interview, watch accompanying video.