Kochi: Gopi Kottamurikkal is the first president of Kerala Bank, which is the first scheduled bank in India in the co-operative sector. The task before him is not easy: he has to establish a new bank and expand its operations all over the country by breaking into the fortress that has been created by big banks. Kottamurikkal, however, feels humbled by the responsibility that he sees both as a challenge and a blessing.
Excerpts from an interview:
How will Kerala Bank compete with commercial banks?
Although the intention is to fully digitise and provide all the services offered by commercial banks, one can expect more from Kerala Bank. Phone banking and net banking will be introduced. There will be more ATMs. We also intend to introduce full core banking. Since it is in the cooperative sector, there are lakhs of members behind Kerala Bank. With their support, it would be possible to beat commercial banks in their own game.
The large deposits in the co-operative bank was due to the higher interest rates offered and lack of interest income tax deduction (TDS). What now? The bank can be run only as per the instructions of the Reserve Bank and NABARD. It will be a challenge to operate the bank by following those guidelines without causing inconvenience to members. There are also lakhs of members beyond politics. The priority is to get the approvals of the Reserve Bank to accept deposits from NRIs. Once we start getting deposits from Malayalees abroad, the domination of commercial banks in deposits will come to an end. That needs to be done if you have to become the number 1 bank.
When everything is digitised, will the number of employees decrease or increase?
It will not decrease. But we will have to recruit more people from the IT field. We need people with experience in technology. Technical experts will be needed both directly and indirectly. The aim is to complete the digitisation process within six months.
Due to the large number of loans, the loan-to-deposit ratio (CD ratio) of the co-operative bank is very high. In fact, in two districts, this is more than 100 per cent. Will that continue?
Commercial banks have only seen Kerala as a place for deposit mobilisation and then provide loans in other states. As the cooperative banks operate in a manner that is diametrically opposite, they are allowed to have a CD ratio of up to 115%. For commercial banks, farm loans do not form even 10% of their loan book. Kerala Bank will provide real agricultural loans. It will also set up refrigeration systems for agricultural products. Agricultural products will not only be procured but also processed and marketed. The bank will also provide help to start cultivation on barren farmland.
Any new ideas?
At the first board meeting itself, the student bank scheme was decided upon. From Class VII onwards, students can deposit their pocket money in the bank. Students getting A Plus grade in all subjects in 10th class will get a gift from the bank. The student-depositors will be able to fund the studies from Plus One themselves by adding the amount provided by the bank along with the deposits made till then. A decision on how much the bank will pay and other things has to be taken. This is an area that no other bank has explored. They can be made the bank’s customers while they are still children.