Banking On Inclusive Growth - Radhakrishnan VS, MD & CEO, Janalakshmi Financial Services

The RBI has been emphasising that there is a need to address inclusion in a commercially viable basis. This is what we wish to focus on.

The Indian banking industry has witnessed strong growth in the past decade and has also created wealth for its stakeholders. Going ahead, what kind of opportunities do you see in the Indian banking sector?

Although the banking industry in India has seen strong growth and has performed well, the challenge of inclusion remains, both in rural and urban India. The RBI has been emphasising that there is a need to address inclusion in a commercially viable basis. This is what we wish to focus on.

Where do you foresee major growth coming from – urban or rural India? Where would your focus be – Tier I cities or Tier II & III cities?

We believe the opportunity of inclusion and inclusion adjacencies exist in both urban and rural India. Urban areas have been our focus so far, but we are now looking at opportunities in the urban/rural corridor.

How would your geographical strategy be? Would you like to develop a pan-India presence or would you prefer concentration on a region?

We are already an all-India player and that will continue.

What, according to you, will be the major challenges faced by new entrants in the banking sector (those that have applied for the banking license recently) versus established players?

The RBI has framed rules keeping in mind systemic issues and not the preference of individual applicants. Obviously the need to meet SLR/CRR and PSL requirements maybe a challenge for some applicants, who are already large and with a non-inclusion focus. Our significant advantage is that we have a large customer base with a relatively smaller balance sheet.

Do you feel the new era private banks would be able to compete with PSU banks, which have better penetration in rural areas as well?

We will be a fundamentally different bank, and will not be comparable with any of the existing banks. Our key differentiator, as mentioned already, is our primary focus on inclusion and inclusion adjacencies.

Do you feel that leveraging the current infrastructure is the right strategy? Or alternatively, do you believe in building different infrastructure?

We already have a significantly advanced technology platform (core banking, CRM solution and an Aadhar-enabled front-end platform), top class management and board and an established and large customer base (over a million customers) that we have served successfully for many years. We will obviously need to enhance these going forward, which we are confident of being able to do.