Ratnakar Bank eyes full-scale retail presence in three years

From being a regional bank to making presence felt in four states, Ratnakar Bank has grown considerably in the last 18 months. But the development phase has just begun, said Vishwavir Ahuja, MD & CEO. At an event to announce Infosys’ Finacle as its core banking technology partner, Ahuja spoke with Vishwanath Nair about his shift from a global bank to a local bank, Ratnakar Bank’s decision to grow its number of branches to about 300 over the next three years from 105 now and the road ahead. Excerpts from the interview:

It’s been two years since you transitioned from a global banker to a hyper-local banker. What have been the learnings? The high and low points?
The straight and honest answer is that there have only been high points. While being at a senior position of a multinational bank I wanted to take on the challenge of building an institution. I had also made a commitment to myself that I will be in India and in some sense wanted to contribute to the country’s growth. A banking platform has all the components to achieve both these goals. My learning from this is that attitude is very important. If you give yourself the attitude of a mission, then the frills of life don’t matter. I don’t mind saying that what we are building in the bank is a middle-class value system, which has the natural achievement orientation built into it.

Could you list five changes that you brought in the bank?
The first thing we did was to create professionalism from top to bottom. We wanted to have a professional ownership and shareholding in the bank, hence the capital infusion of Rs 750 crore we did recently was from pedigree institutional investors. Secondly, we wanted to create a completely professional and independent board of directors. We have a board which only comprises professionals with excellent track records. I am the only executive member of the board; all others are independent, which is very unique. Thirdly, we wanted to create a strong management team, where we got professionals who have decades of experience and track records to prove it. We took that down further in terms of the kind of people we brought in. Along with this, we built processes, systems and technology to very high standards.

What would be the brand positioning of the bank going forward?
We have the legacy of a bank in our hands, which is regional in focus with a high level of presence in semi-urban and rural areas. Now, when we look at legacy we say this is great and it should not be diluted or lost. However, if you want to build a strong and successful bank, you cannot be segmented. You need to have end-to-end capabilities and for that you need to have metro and urban presence, also. We will build a successful commercial banking business and then eventually we will also expand our footprint, so that in the longer term we have a credible retail business.

What is your customer base like? Where do you see your retail business going ahead?
Our customer base is largely semi-urban, rural with a judicious mix of some urban customers. We do have retail customers along with a large chunk of small and medium enterprises (SME) customers. As we expand, we will deepen this mix, across segments. We perhaps won’t be in an entirely metro location before we have a decent presence in a suburban location. I think that is where we have the SME opportunity. So when we put up newer branches, we will first compete in that segment. We will take care of our immediate customer base, grow with them, taking them to the next level while increasing our capabilities to take on bigger customers. We want to be a full-scale retail bank operating in all segments. In the next two to three years, we will have built our capabilities to function in all retail segments.

Would you say Ratnakar will be a prime takeover candidate once the banking licences are issued? Do you see that happening?
No, I don’t believe so. These are very distant dreams for anybody. As far as we are concerned, we are in an evolutionary phase; all these things will follow. We are planning to build this bank into something bigger, till then nobody among us is even allowed to think of such things, certainly not me. May be three or four years down the line when we have become bigger, then maybe we will think of these things.
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