Will still stay cautious on disbursements: Cholamandalam

A: We have a fairly large field force both on the sales and collection front and across sales and collection we are expecting between 20 percent and 30 percent improvement in productivity with this whole tablet solution that we will be deploying across the frontend force.

Reema: Is it possible to quantify the operational efficiency you hope to achieve, have you setout any internal targets if you could tell in terms of how your margins will look?

A: In terms of actual operation gains, we think that over time this will yield to between 30-40 bps gain in terms of operational efficiency in terms of reduction of opex to assets, and that currently in our book is about 3.5 percent and just this initiative will help it bring it down by 10 percent in terms of that number.

Ekta: We do understand that you all have applied for a payment bank license. Can you tell us whether you have narrowed in on a possible partner for the same based on the fact that you might get approval and how much would you look to pump in if in case you do get approval?

A: If we get approval the minimum amount required is Rs 100 crore, so we will definitely look at investing that. In terms of operational partners, we will explore but it is premature at this stage because we want to first see if the Reserve Bank of India (RBI) approves it for us. Forty two people have applied; it is unclear how many people the RBI will approve. As soon as we know whether we have got approval or not then we will start formalising in terms of partnerships.

_PAGEBREAK_

Reema: When we had spoken to you the previous time you had indicated that you hope the gross NPAs are at peak and they will start reducing. Considering the fact that the recovery in the auto space has not been as per what the street and the industry was hoping for, what is the outlook looking on gross NPA, how is it shaped up in the January to March quarter so far?

A: On that we are very happy with our performance over the last five months. We have invested significantly on the GNPA front and we are definitely seeing to reduce GNPA and we are seeing that payoff. We have seen improvements in collections performance for the last last four months running and usually it continues to March. So, it’s definitely going to help us in terms of reducing GNPAs. We have seen it come off from our peaks and we do believe that now that we have set a process in place where we will see that reduction sustain over time.

Ekta: Can you quantify, since you have seen collections recover or increase in the past five months, are you more confident in terms of disbursement growth and if you are what is it looking like?

A: In terms of disbursement I would like to see the numbers come down a bit more before we get too aggressive on disbursements. So what we are going to do is still stay cautious on disbursements for this quarter, usually January-February-March tends to be a very high growth quarter for disbursements. We are going to be slightly cautious on the disbursement side, just that we are more focused on getting very strong improvements in portfolio quality before we start pushing out too aggressively on disbursements. I do think that we will start taking more balanced approach and starting to increase our disbursements going into next year. So, naturally we will see some gains this quarter, we do not plan to go too aggressive in the January-February-March timeframe.

Reema: What is outlook about FY16 in terms of disbursement, will it be a growth in perhaps single digit or could it be as high as double digits?

A: We feel we are going to have double digit growth in our used and in our older vehicle book. So our used portfolio will see double digit, the new portfolio, we will see single digit in our minds.