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In the current economic scenario where there are increasing number of defaults and rising number of NPAs, what measures is bank taking to tackle these issues?

In order to ensure effective credit monitoring, identification of stressed/special mention accounts and to strengthen follow up of assets an exclusive Credit Monitoring Department [CrMD] has been set up at the Bank?s head office. Credit monitoring teams have been formed at the Bank?s regional offices for immediate identification & monitoring of stressed accounts. Asset recovery management branches have been set up at three centers namely Bengaluru, Mumbai and New Delhi for effective follow up and resolution of NPA accounts through securitization and other means.

Reserve Bank of India is currently issuing new banking licenses. While this translates in to increased competition for existing Banks, what impact do you foresee it would have on Indian banking system? What measures is your Bank taking in order to gear up to these new challenges?

Entry of new banks is a welcome move which will provide new business opportunities to banks and witness heightened marketing skills and efficient & innovative modes of service delivery. However, the banking sector may come under immense pressure due to compressed spreads, increase in customer?s expectations, decline in customer loyalty etc. Access to low-cost funds and productive deployment of funds would be some of the major challenges the banking sector would face apart from the already existing pressure on asset quality and capital adequacy.

Karnataka Bank's strategy: Well, during the purposeful 92 years of existence Karnataka Bank has always responded to the challenges suitably and has been able to deliver strong and consistent financial results. The Bank has a well-stabilized technology platform, relatively young and loyal work force, well diversified and wide spread shareholding, strong and satisfied customer base and strong presence in 21 states & two UT, and as such is well fortified to meet the new challenges.

Technology is changing the face of Indian banking system. Can you throw some light on how has your Bank evolved to tap the opportunities created by technological advances?

The continuous efforts of the bank to leverage the use of information technology in its various delivery channels has been well received by the customers especially the younger generation and also improved the business figures of the bank over the years. This also has helped widen the customer base to a large extent. The Bank will continue to use information technology in its operations to provide better banking experience to its customers. Towards this end, it is proposed to introduce new technology based products such as Near Field Communication Card, Mobile Virtual Card, Mobile Wallet, IMPS [through multiple delivery channels] and a host of other technology based products, during the current year. The Bank is poised to participate in UPI project of NPCI which will enable the account holder to send and receive remittances from smartphones without the necessity of visiting the branch.

How do you see Indian banking system shaping up in 10 years hence?

Competitive pressure is building in the Indian banking system, by way of granting new licenses, on-tap licenses and the entry of payment banks and small finance banks. Going forward we may also see niche banks coming up catering only to specific sectors like agriculture, channel finance or even start-ups.

I see banks going far beyond their traditional role of being mere provider of finance & acceptor of deposits. Technology will be the major enabler to increase the ease and comfort of banking for customers. Only banks that are based on sound robust framework and adapt swiftly to change will flourish.

Going ahead, ?Digital Banking? will be the order of the day, with more and more customers including rural customers, carrying on majority of their banking transactions through digital channels.