ET Now: Macquarie has mentioned that the firm is taking a threat by giving excessive yielding loans to MSMEs, how are you evaluating the house while you give out the loans?
Dr N Kamakodi: Honestly talking, nearly all scheduled industrial banks have been targeted on the working capital mortgage, significantly to the small and medium scale enterprises, who weren’t going for time period loans 20-25 years in the past – earlier than the arrival of the new era financial institution – subsequently, issues modified and the idea of time period loans change into common.
Lots of banking’s time examined values have been questioned and plenty of of our friends migrated to newer initiatives – publicity to the infrastructure sector, moving into consortiums – that, in actual fact, didn’t find yourself being very worthwhile to the system at giant, and even ended up creating a lot of points.
We solely did one factor, we continued with the previous means of banking, with out compromising the methods put in over centuries. We are maybe the third oldest financial institution in the nation after
and . That’s how we have been capable of get the risk-adjusted return you check with.
ET Now: After the
fiasco, traders’ focus has been having on granular books; how granular are your books, by way of deposits in addition to liabilities?
Dr N Kamakodi: In truth, because you quoted the Macquarie report, they’ve clearly spelt it out. We are maybe considered one of the lowest in the trade by way of our general advances guide and the focus threat could be very much less when you measure from that perspective.
Overall, we had always maintained that we’ve got been a banker for the ‘aam aadmi’ and never massively concerned in company banking. Our focus is on small and medium scale enterprises and to be the sole banker, having complete management over belongings and money flows; which has helped us to make sure that we aren’t placing all our eggs in a single basket. We have a portfolio which could be very granular – that has helped us to tide over many financial cycles which the banking trade has seen over a interval of 100 years.