Monday, September 10, 2012

P. R. Somasundaram, Managing Director and Chief Executive Officer, Lakshmi Vilas Bank (LVB)

In a tête-à-tête with B&E’s Mona Mehta, P. R. Somasundaram, Managing Director and Chief Executive Officer, Lakshmi Vilas Bank (LVB) speaks about the growing importance of retail banking in the Country and the bank’s expansion plans to exploit the opportunities coming its way.

B&E: What are the new marketing initiatives that you are focusing on to increase your customer base in the retail banking arena?
PRS: LVB is an 83 year-old private bank with 1.64 million satisfied customers. In order to increase the base further we are concentrating on wealth management by offering related products and services. We are looking at steady growth in the retail lending space through secured lending measures like mortgage lending. However, as a policy of the bank, we have temporarily restrained ourselves from the unsecured categories like credit cards and personal loans.

B&E: With the number of participants increasing, competition in the Indian banking sector has moved up to a different level altogether. Banks are now competing to reach out to the huge unbanked population. How is LVB planning to deal with the situation?
PRS: The new management’s focus is to reposition LVB as a new generation bank and make it a top performer in terms of customer service, efficiency, productivity and profitability in the next 3 years. And to achieve it we are planning to start a housing finance company, increase our national presence, and leverage on our expertise in the IT domain. We have also tied up with LIC and Bajaj for life and non-life insurance distribution. The insurance venture is taking off really well for us. Apart from the centralised plans, we are also looking at drafting a town-wise strategy soon, particularly for the semi urban areas where we currently have 105 branches.

B&E: You have only 180 ATMs of your own. Don’t you think this will be a big roadblock in your retail dreams?
PRS: It’s true that we have only 180 ATMs, but at the same time we are also linked to other banks. So our customers can actually use 54,000 other ATMs belonging to various banks. Nevertheless, we are adding more ATMs every month and expect that our own ATM network will cross the 300 mark in the next 2-3 years.

B&E: Apart from CASA, how is LVB planning to strengthen its portfolio in areas like housing loan, auto loan et al?
PRS: Talking about auto loans, we do not intend to enter the 4-wheeler or 2-wheeler segment any time soon as these have collection challenges that may not be ideal in our current set up. However, we do have a presence, though small, in the transport vehicles segment. And we have plans to take it further. So, we are currently piloting a project that is expected to create a mid size opportunity for us in the segment. In the housing segment, we already have sizable portfolio and intend to grow it significantly through alliances; preferably through a Housing Finance Company. Apart from these, our new management team is now focusing aggressively on growing all business verticals of the bank and retail banking products. We have also included loans to MSME sector among our focus areas.


Source : IIPM Editorial, 2012.
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