IPO to add around Rs 800 cr to net worth: RBL

A: I just want to may be reference that discussion to the way we have built out over last four–five years. We have been very focused on creating the capability, the entire framework process risk management and building all our core segments. Each of which has different investment and payback and strategy. I think as we see the opportunities forward we believe actually the banking market has significant opportunities. There are more client segments which are coming into the formal banking channels.

Therefore, we will continue growing. I am not going to be able to pinpoint an exact numbers but we are structured for delivering higher growth. However, the growth is predicated on very strong fundamentals of risk discipline, people quality and process.

Latha: You are also listing at a time when there is heightened competition in the banking space. You have a foothold in Karnataka as well and there you will have all the Janalakshmi Financial Services and Equitas Holding all of them becoming small banks. You have the State Bank of India (SBI) behemoth also fighting it out, now a merged entity. Payment banks coming into take some money. Will you be able to grow your liability franchise at this pace? Not just base as Anuj was pointing out but also heightened competition. What is the normalised growth?

A: It is a good question, I think deposits are always very important and what we have demonstrated in perhaps much tougher macro environments of the last four-five years that we have continued building a deposit franchise and actually have diversified it a lot. Obviously, the first two to three years was really a matter of getting the basics stuff done. Over the last two to three years some of that has played out very strongly. I think competition has always been there. I don’t think we should assume that competition is less or more. We have to focus on what we can do well relative to the rest of the competition or part of the competition and how do we engage with our clients segments more purposefully and so that we become ultimately as we want to call it a bank of choice.

However, that is a long journey. We have already kind of crossed the first phase. We are quite confident that if we continue focusing on the fundamentals of what clients want, it will continue delivering the deposits and the other businesses we expect to do.Sonia: To take that point forward you do have high amount of concentration in states like Karnataka and Maharashtra but what the street has liked is the fact that you have been able to double your branches over the last five years, currently standing at about 200 branches. Can you give us the sense of what kind of branch expansion we can see and what kind of geographic expansion we can see over the next three to four years?

A: When we came in substantially the branch network was south-western Maharashtra and northern Karnataka and then we had expanded in to another 10-12 Indian states like Gujarat, Tamil Nadu, Madhya Pradesh, National Capital Region (NCR) has been the base for North. We have just established Kolkata about two-and-a-half-three years ago. We also follow multi channel distribution strategy basically around each client segments. So, while our branch network which stands at 197 as of March 2016, will continue seeing growth.

It will be structured around the relevant segments which need branches. We have had a much broader footprint with our exclusive partnerships with business correspondence (BCs) for our rural business, as well as we have a much extended outreach for offering. It is a very simple financial services to the under bank unbanked which does not need a bank branches and perhaps that is the focus area of many payment banks to be coming in to the market. We have been building this out for the last two years. So, you will see us growing a branch. You will see us doing a lot more partnerships with the BCs and using the extended retail footprint which is available to deliver financial services in a simplified manner.

Latha: What is your current and savings account at this point in time? How much current, how much savings?

A: If numbers are right I think we are about even in terms of current savings perhaps may be savings as a little more and savings has done quite well over the last 18-24 months.

Latha: What is the total ratio then to total deposits?

A: 18.6 is where we closed March 2016 on the whole current account saving account (CASA). CA and SA is just about balanced.

Anuj: Coming back to the question on growth that you mentioned but what about cost specially staff cost because as you grow bigger you will have to acquire talent and as Latha was saying the competition is only hotting up in the private space. So will cost also go up may be even higher than the income growth?

A: If you see in the last with starting March 2014 where we really peaked on our cost-income ratio and that is a reflection of several things. We were front loading the entire expansion the entire retail strategy in terms of branches, technology, people, process operations and since then you have seen actually the cost-income drop secularly between March 2014 and March 2016.

March 2016 we ended at 58.6, March 2014 was above 70 and I think today we have built a platform which has significant capacity. Many of our learning curves are behind us in terms of our various businesses. We are able to onboard and acquire client business much faster, able to engage with clients a lot more in terms of their own wallet share. That is the journey we should expect going forward of high degree of operating leverage.

As far as talent is concerned, you are absolutely right, the supply of talent always has a lag. Very early on we were able to attract a very strong set of people talent and able to build the bank. Today we are 4,000 odd in terms of HR and we have a very strong internal pipeline of talent building of inducting freshers and building them through the ranks and then a partnership’s strategy allows us to manage the talent challenges which will keep emerging in India where the partners are also building on the back of our infrastructure, our product but really some of the HR and the talent is what they are focused on. So, it will be a mix of strategies growing ourselves as well as leaning on partners and technology. However, there is no other way of building a high quality franchise and focusing on talent and building a very strong process around it.