When the economy is opened up, we will have more opportunities: CVR Rajendran, MD & CEO, CSB Bank.

The Gold loan will remain a priority field for a few more years. We are only a minor competitor, but my sources are expanding.

How do you see the current prosecutor, given that it has grown 24% in the last fiscal year and the second wave of the pandemic is seen as vital? 

There is no guide as the situation is very unpredictable at the moment. Our target growth is 25% for the year. Our balance sheet is still tiny, and growth will not be a problem. The first quarter will be very weak, and then the Indian economy will come back strong. I’ve seen this happen. We’ll have a lot more to do. Gold Loan

Opportunities when the economy opens up. Which sector do you think will grow from?

 Your gold loan is up 61.3% year over year but has slowed sequentially. Gold lending will remain in focus for a few more years. We’re still fringe gamblers, and my selling points are rising. 

We also focus on retail banking and SMEs. Especially gold loans?

 Currently, the demand is negative, mainly due to gold loans. We have reduced the LTV (Loan to Value) since March 2021 and are concentrating on the collection of loans with a high LTV. The gold loan portfolio of all players. But even in this market, the gold loan is the only product available. Personal loans are not encouraged, and there are no unsecured loans in the market. So we move on to the next segment, where people who have never taken a gold loan take it. Today’s average ticket size is Rs 1-1.25 lakh, which will probably change to an average ticket size of Rs 3 lakh. 

How much gold do you have in your possession, and what is your current average LTV?

The average LTV has dropped to 68% and was 83% at peak times. The gold loan portfolio grew 61.3% year over year to 6,131 billion rupees, and the bank has 17.28 tons of gold in its custody.

Are you concerned that when people return from the Middle East, NRI remittances will slow down? 

My share of the NRI deposit market is minimal. While it’s 24% of my total deposits, CSB barely accounts for 3% of the total transfers that reach Kerala.

 CSB Bank can still grow in the market due to our low participation. On landslides in the next fiscal quarter?

 The decline in gold credit is more prominent, which is the first time I’ve seen such a decline in the gold credit segment. Gold credits cover the lower segment. Corporations are fine, but day earners are. Collection of gold credits, but beyond a certain level, there is nothing we can do. But our NPA in March is lower than the NPA in December. Corporate loans do well. SMEs do well in selected sectors; only small loans do poorly. We’ll have to wait longer to know the effects. There will definitely be an impact. CSB is planning 200 new branches.

 What about new products like credit cards? 

In Kerala, we will open on the north side, where we are not very present. We will open more branches in Tamil. Nadu, Karnataka, Goa, Andhra Pradesh and Gujarat. Our primary focus will be the southern and western states. We also plan to launch credit cards in conjunction with larger banks. We’re too small to introduce our credit card, so we’re speaking to a leading public sector bank and private bank to introduce co-branded cards.


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