Speaking to CNBC-TV18 Chanda Kochhar, MD & CEO, ICICI Bank said the need of the hour was to make customers life easy and so all their branches were stocked up well to meet customers‘ needs.
On Thursday, banks reopened after remaining closed for a day to make provisions for servicing customers on account of demonetisation of Rs 500 and Rs 1,000 notes.
Speaking to CNBC-TV18 Chanda Kochhar, MD & CEO, ICICI Bank said the need of the hour was to make customers life easy and so all their branches were stocked up well to meet customers’ needs.
Government’s effort to crack down on black money would help reduce liability of the Reserve Bank of India and help increase deposit base.
The bank itself saw 70 percent extra footfalls and good growth in deposits.
The bank is also likely to open its ATMs by early evening on Thursday to further help its customers, said Kochhar. She also specified that with the withdrawals going up today none of their branches had run out of cash.
Below is the verbatim transcript of Chanda Kochhar’s interview to Latha Venkatesh, Anuj Singhal and Sonia Shenoy on CNBC-TV18.
Latha: Any numbers you can share with us? It is about half a day, in fact one full consumer working day, what have been the collections and deposits looking like?
A: I am very happy to say that things have moved very smoothly. It is not correct to talk about the value of collections and deposits but I would say that we have seen already more than 70 percent extra footfalls in the branches. Already in half a day footfalls have been up by more than 70 percent, almost double actually during this period.
We started some of the branches from 8:00 AM onwards, the rest of the branches from 9:00 AM onwards. We had started moving currency from yesterday early morning, whole night throughout the currency moved, so, we have stocked up the branches well. We have trained the employees, we have created extra cash counters, we have created some extra facilities for the senior citizens and I am very happy to say that the day has moved pretty smoothly.
Latha: For the economy or for the investors in your bank itself the bigger interest will be are you seeing a decent growth in deposits, is it on a pro-rata basis compared to any day did you see a good growth in deposits?
A: Yes, I will definitely say that that we had very good growth in deposits but I would not like to give out the daily deposit number. However, clearly yes this is a time when banks will see good growth in deposits but right now for the banks we are not looking at this as some day of business opportunity, we are looking at this more as a day of serving the customers so that they can meet their needs. As you sad, every customer needs that daily cash to move on and I think it is our duty to focus on making customers life easy in that respect.
Anuj: You may not want to give numbers for the bank but for the economy as a whole, do you have any ballpark numbers?
A: We must expect that this whole exercise will do two things for the economy as a whole. One, that finally it reduces the liability of the Reserve Bank of India (RBI) itself because some amount of the money will go off the system and second is that a lot of that money, the balance part of that money will come into the banking system. So, it will increase the deposits.
I think the numbers are known. Everybody said that the overall number of the currency in circulation was Rs 14 lakh crore, now it is upon us to arrive at what percentage of that would come into deposits and what would go away. Little too early to talk about it but I think these are substantial numbers and large numbers.
Latha: Can we work with Rs 2 lakh crore or is that conservative?
A: I would tend to believe that that is conservative.
Latha: So you are working the Rs 3 lakh crore so that would be a 3 percent increase in deposits, isn't it?
A: Yes, but as I said, the numbers are going to be big, both ways, the ones that come into the banking system and the ones that reduces the liability. So, both the numbers are going to be large. Right now, I think at least as far as the banks are concerned, our focus is to serve the public, in fact I would say not just customers. We have served customers as well as non-customers and we are managing the queues very well.
Sonia: Over the next three to six months, how much do you think the deposit growth could be? So, far it has been in low double digits but going ahead what is the estimate?
A: As I said, it is too premature. Let us not jump on to deposit growth estimates right now. Let us just first ensure that this big bold transformational step that our Prime Minister has announced -- let us in the next few weeks manage that and implement that properly. I think that is our focus.
Latha: We were just asking because should one expect a fall in fixed deposit (FD) rates, because you guys will have a lot of money, why would you want to pay 7 percent on an FD, should we expect deposit rates to fall?
A: On a broad this thing I will make a statement that interest rates are the result of demand and supply. So, you can definitely keep that in mind but at the same time banks don’t always only look at the profits. If you look at currently, there are no charges for cash deposit or cash withdrawal at the same time. So, I think everything has to have its right focus and right now the focus is on serving. Overall, the interest rates will move depending on how much supply comes in.
Latha: I wanted to ask you, today did any of your branches run out of cash because of the demand and secondly tomorrow will you be able to open all your ATMs?
A: Clearly the answer is no, none of the branches have run out of cash. As I said, from yesterday early morning we have been moving cash and we have worked overnight and moved cash to the branches. In fact some of the branches today we did a second round of replenishment because we have been monitoring very clearly at what rate the cash is being given out. So, we have done a second round of replenishment in many of the branches. So, we did not run out of cash.
ATMs in fact for our customers, we will open by early evening itself. So, clearly we are all geared up to open the ATMs as well. There is just one thing that I want to actually tell the customers, it is that, one, there is enough supply of money but there will be some amount in Rs 100 notes and some amount in Rs 2,000 note. So, people should even accept the Rs 2,000 note because all said and done that is also the legal tender that we are giving out. Only insisting on Rs 100 note may just cause that much more pressure on the system. I think that is an overall statement that I would make that would be true for everybody.
However, I am very happy that the customers have shown orderliness in this whole thing but they should continue with that because the banks are doing their best and there is enough money and there is enough time for us to go through this whole thing.
Sonia: Wanted to ask you one word on the future course of earnings because this time around we have noticed that the resolution to stressed accounts is happening at a faster pace which is a good thing. Should we expect a further reduction in your watch list in the quarters to come?
A: Just last week we have declared our results and we have spoken enough about this. So, right now I think we are all very busy managing the situation. Let us leave it at that; I don’t think today is the time to talk. Our focus is the customers and non-customers and let us just keep focusing on that.