IDBI Bank will launch a technology platform for credit cards in the next three months, deputy managing director Suresh Khatanhar has said.
“We are coming out with an end-to-end digitisation of credit cards from onboarding to underwriting to issuance. That journey is under testing,” he said, adding that the bank will first put the infrastructure in place before launching the service. The service will run on the basis of straight through process.
The bank has issued 33,451 credit cards as of September 30. Its market share is negligible at 0.03%.
Gross advances rose 16% year-on-year (y-o-y) to `1.7 trillion as on September 30. The retail segment rose to 70% of the overall portfolio from 65% earlier.
The bank is looking to maintain a core net interest margin of 3.75-4% in the current financial year. It has posted a core net interest margin of 3.94% in the September quarter.
“My cost of deposits is at a mere 4.23% and cost of funds is 4.49%. These are manageable and keep our margins steady,” he said, adding that the bank may be able to recover slightly more than the projected `4,000 crore this year, which will also aid the margins.
Additionally, the bank is witnessed traction in the corporate loan segment, aided by demand from both large corporates and micro, small and medium-sized enterprises (MSMEs).
“In the large corporates, there is a demand for non-fund type of requirements. In the mid-corporates, there are fund-based requirements,” he said.
The bank’s CASA ratio fell to 51.5% as on September 30 from 56.2% a year ago. This means that low-cost current account savings account (CASA) deposits now comprise 51.5% of overall deposits.
“During Covid, the liquidity has increased substantially in the economy, so it appears to have fallen in recent times. But if you see the average of last 4-5 years, it has actually corrected,” Khatanhar said.
He added that while discretionary spending saw a lull during Covid-19, it has picked up once again. As a result of this, risk appetite of investors has improved , more avenues for investment have sprung up, and term deposit rates have gone up. Hence, there is some impact on CASA ratios across the banking industry.The bank intends to keep its CASA ratio at above 50% going ahead.
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