There are no intentions for Canara Bank to invest in aviation firms going forward. CEO

There are no intentions for Canara Bank to invest in aviation firms going forward. CEO

There are no intentions for Canara Bank to invest in aviation firms going forward. CEO

Canara Bank Q3 Results: According to MD and CEO K Satyanarayana Raju, the bank has also chosen to concentrate on the retail, agricultural, and MSME sectors, which should make up 40–60% of its corporate loan portfolio.

There are no intentions for Canara Bank to invest in aviation firms going forward. CEO K Satyanarayana Raju of public sector lender Canara Bank said in an exclusive interview with Moneycontrol on January 29 that the bank has no plans to make any further investments in aviation firms.

"With the exception of the little Tata Group, we have no experience with aviation firms. And at this time, we don't intend to have any further exposure," Raju said.

He stated that the bank has set aside Rs 1,000 crore, of which it has already invested Rs 700 crore, to improve its technology over the next several years.

The following are edited quotes from the interview:

What level of exposure does Canara Bank currently have to airlines? What are their future intentions for financing to this industry?

We don't have any exposure to airline firms outside from Tata Group. Additionally, we don't currently have any plans for any more exposure.

Canara Bank had strong results in Q3FY23–24. How long-term is your development trajectory?

Over the last few quarters, we have shown to be stable and growing steadily. However, interest rates on deposits are rising. It's difficult for anybody to keep this number in such a setting. We do not want to boost the top line at the expense of the bottom line since we are continuously monitoring the situation and are cost-conscious.

We are thus keeping a healthy balance between these two factors, and we are optimistic that credit will rise by around 12% year over year (YoY) in the next quarter as well.

How do you feel about the loan-to-deposit ratio?

We concentrated more on credit in Q3FY23–24 as we had already attained our goal of a 75% CD (credit–deposit) ratio. Our CD ratio was 68% two years ago. Interest revenue was being lost at a rapid pace. We have thus advocated for raising loans relative to deposits.

How do you see the business loan book going forward?

We have determined that 40–60% of our corporate loans would go to the RAM sector (retail, agricultural, and MSME). I have no doubt that RAM will continue to expand at a pace of 14.5% during the current quarter (Q4FY23–24), even if my corporate loans will rise at a rate of 10%. This quarter, we are launching many programs to encourage the use of CASA (current and savings accounts) and retail fixed deposits.

We have also released a smartphone app specifically for business users. The business sector expressed a strong need for something like to our retail mobile app, given its great popularity.

What is your monthly budget for technology?

We have allocated a sum of Rs 1,000 crore for technology over the next five years, of which Rs 700 crore has already been spent.

We opened our cutting-edge Center of Excellence for D&A (Data and Analytics) on January 1, 2024. It's the first of its sort in the business and among public sector banks. We are seeing a return on our technological investments.

We are establishing a virtual customer service area and branch. Our crew is receiving virtual communication training from us.

How about security online?

We have designated a Chief Risk Officer already. As on April 1, 2024, we will also have a distinct department dedicated to cyber security. Cybersecurity has always been under the risk division. A Chief Security Officer (CSO) will oversee the Cyber Security Department and report directly to the Whole-Time Director.