RBL Bank has completely shed its the image of an old private sector bank. The credit goes to Bank of America's former CEO Vishwavir Ahuja , who has been at the helm of affairs since 2010. In an interview with Business Today, Ahuja discusses the bank's new initiatives. Edited excerpts -
ON THE UNIQUENESS OF RBL:
We are a professionally driven and professionally owned bank. Our entire board comprises independent directors. All our employees are also shareholders. Everybody here feels that they are part of the institution. There is a very high level of service culture.
THE NEXT LEVEL FOR THE BANK:
We are certainly not sitting on the successes achieved so far. We are in the interim phase in our long journey. There is so much more to do. We have put all the right ingredients in place like quality people , processes, technology, leadership and so on. But these engines have to fire now. We have to take the bank to the next league in terms of size, scale and competitiveness. We believe a good bank is all about good management and good governance. We have already begun an internal exercise for 20:20 vision.
ON FUTURE POSITION:
The bank's focus is on small tickets. Today, the non-branch channels (BCs) is 60 per cent semi-urban and rural and urban and metro areas constitute the rest. We want to be in time a mass banking institution rather than an urban centric bank. At the rate we are growing today, we will not be a small bank in future. We already have 1,500 delivery points/ cash points and they are growing. We are already in 13 states today. We will touch 17 by next year and 20 in the following year.
ON CUSTOMER ACQUISITION:
Customer acquisition is like a hockey stick for us. We used to do business with 3,000 to 4,000 customers a month a few years ago. Today, it is 30,000 a month. We will ramp it up to 50,000 customers a month in the next six months. We will have more than 2.5 million customers. Our penetration is right into the hinterland. We will have a significant pan India presence in future.
ON RAISING CAPITAL:
The next firepower will come from the IPO. We will raise significant chunk of capital in the near future. Today ,there is no single promoter. Earlier 11,000-12,000 shareholders owned the bank. It was set up as community bank by traders. In the last few years, big institutional investors like HDFC , IFC, Kartika, Norway Partners, CDC have come in. All these shareholders own 4-5 per cent stake each. There are close to dozen investors with 55 per cent-plus shareholding. The original promoters have 25 per cent, 10 per cent with employees and rest with High Net Worth Individuals.
The last round of capital infusion in March 2014 was about 1.9 times to 2 times the book. Certainly , it has to be better than this. The world already sees as a new-age bank. We have completely shed the image of old private sector bank.
ON HIGH COST-TO-INCOME RATIO:
The year we stepped in, the cost-to-income ratio was 0.83. Today , it is 0 .60. By this year end, the ratio will be around 0.50. You must understand that we have made lot of investments in people, processes and infrastructure.
ITS KEY DIFFERENTIATOR:
Wells Fargo is a very professional institution with a strong focus on customer excellence. For them more than the what ,it is 'how' that matters. How you do something is more important than what you do. It is very difficult to differentiate one bank from another today. What matters is how fast and efficient you respond to customer demand and need. Are you transparent in dealing with the customer? We are building a Wells Fargo kind of a bank focused on being a friend and partner of the client. We don't do certain things like high-risk project finance, infrastructure and so on. We have remained aligned to our DNA as a small-ticket loans bank. We want to remain focused on what we are good at.