MC Interview | Expecting RBI to clear new MD and CEO by next month: South Indian Bank's Murali Ramakrishnan

Murali Ramakrishnan, MD & CEO South Indian Bank

Kerala-based South Indian Bank is expecting to have a new managing director and chief executive officer by August 2023, outgoing MD & CEO Murali Ramakrishnan told Moneycontrol in an exclusive interview.

“By August 2023, we’re expecting the Reserve Bank of India (RBI) to give its clearance,” said Ramakrishnan.

On March 28, the bank’s Board said it has considered Ramakrishnan’s request not to be re-appointed, for personal reasons. He is set to complete his term on September 30, 2023.

Ramakrishnan said SIB wants to reach closer to 4.5 percent Gross NPA by the end of the year.

Edited excerpts follow:

By when do you expect to have a new CEO?

We’ve already selected two prospective candidates. We are constantly in touch with the RBI. Once we get consent from them, then the person obviously will communicate and then the handover will happen. By August, we’re expecting RBI to give clearance.

Is the bank interested to join RBI's CBDC pilot project?

We do get requests from the regulator (RBI). But then we have to assess whether we will be interested in joining — that is something we'll have to decide for ourselves … after evaluating it thoroughly.

A lot of investments are needed and therefore, we need to prioritise. Large banks have more money and they are also taking over prioritised subjects. Therefore, we don’t want to rule out the possibility — we will evaluate it properly and then decide.

What were the key drivers behind your net profit of Rs 202.35 crore in Q1?

Advances have grown significantly if you compare them to Q1 of last year, which was at 64,000 crore. We have improved that to 74,000 crore or so — Rs 10,000 crores got added during the year due to some products taking off quite well. Corporate has taken off very well, gold has grown, and credit cards, too.

We’ve very carefully managed the cost of deposits and are looking at how we can continue to have a lower cost of deposits. And now, we can pass on the increase in cost to the customer. While doing all of that we're very conscious of the quality of the asset we are holding.

What is the growth outlook for the next financial year?

When we set the target for the full year we want to grow the assets book by 13 percent, 2x the GDP growth anticipated for the country. So, we are setting ourselves a target of 82,000 crore by the end of March.

Currently, we’re at about 74,000 crore. We will also be introducing three new products.

What are your business expansion plans?

We are not looking at the growing number of branches even today, because we know that digital is going to be the name of the game, and we’re digitising all the businesses.

Does SIB have any exposure to airline companies? If yes, how much? Have you received any applications from Spicejet for loans?

No, we have nil exposure to any airline companies. We are not into that space at all. We are not at a stage where we want to fund industries that are (not doing well) — which I know; I've dealt with them in an earlier organisation. So, we'll be cautious. I don't think it's a segment that we’ll enter now.

What is your target for NPAs?

On net NPAs, currently we are at about 1.85-1.86 percent. We want to reach closer to 1 percent. As for gross NPAs, we are currently at 5.13 percent, which we want to reach close to 4.5 percent.