South Indian Bank to submit report to RBI in two weeks to reboot co-branded credit card business, says MD

The bank, Seshadri said, is looking at more fintech partnerships to grow deposits, especially time deposits

South Indian Bank is expecting to complete internal reports pertaining to its co-branded credit card business and send the same, along with its application, to the Reserve Bank of India (RBI) in around two weeks to restart the vertical, said P Seshdari, the bank's Managing Director and Chief Executive Officer (MD and CEO). This comes after the central bank barred the bank on March 14 from issuing co-branded credit cards.

“We are trying to fix certain issues and were expecting the same to be completed by around July 16. But there is a slight delay and we expect to complete the process in the next two weeks,” Seshadri said, in an interaction with Moneycontrol.

Also, the bank  is looking at more fintech partnerships to grow deposits, especially time deposits, he added. In the first quarter of FY2024-25, the bank reported 8 percent year-on-year growth (YoY) in deposits. “We are expecting to grow deposits by 10-12 percent in this fiscal year. We will look at better engagement with customers and develop fintech partnerships, mainly for time deposits,” he explained.

Edited excerpts from the conversation:

What are your thoughts on your Q1FY25 numbers?

We had a reasonable quarter where our credit grew by 11 percent on a YoY basis, and deposits by 8 percent. We also recorded good growth in current account and savings account (CASA) deposits.

Also read: South Indian Bank posts 45% jump in Q1 net profit at Rs 294 crore

Revenue growth was also strong at 10 percent, and our expenses were flat on a sequential basis, but rose 15 percent YoY. Our net non-performing assets (NNPA) fell by 2 basis points (bps).

Housing, retail, micro, small, and medium enterprises (MSMEs) saw double-digit growth in the quarter.

Is there any update on the regulator's action on your co-branded credit card business?

We are trying to fix certain issues and were expecting the same to be completed by around July 16. But there is a slight delay and we expect to complete the process in the next two weeks.

Then, after completing the internal reports, we will send the same, along with the application, to the RBI.

Also read: Federal Bank, South Indian Bank announce measures on co-branded credit cards

Banks are struggling to garner deposits, but you recorded good growth on the CASA front. What is the plan going ahead?

We plan to change our focus on the CASA front and try to engage better with our customers. We are also looking at more fintech partnerships to garner deposits, especially time deposits.

How are you looking at growing digitally?

We have recently formed a new unit to look at our digital business. We have resolved the issues we had earlier with our automated platforms.

Going ahead, we do not plan to have any significant developments on the tech front.

Also read: Tata Motors ties up with South Indian Bank for commercial vehicle finance

In the past few months, gold prices have risen significantly. How has that impacted your business?

Our gold business continues to be strong. Tamil Nadu is our biggest market, followed by Kerala. The rise in the price of gold has resulted in good growth, but we are closely looking at the business as any drop in prices going ahead can affect our margins. We are tracking this.

On the personal loan front, what is your strategy?

We did not report much growth in personal loans, but we are working on some relationships. These are expected to be active in the second quarter of this fiscal.

Can you give some guidance for this fiscal on your deposit and credit growth?

On the deposit front, we are expecting to grow 10-12 percent from the existing 8 percent. The outlook on credit growth is also the same, around 10-12 percent for FY25.