In conversation with Shri Bhavendra Kumar- Executive Director of Canara Bank

It's important to note that our aim is always to outperform our guidance, whether it's for the public or investors. This mindset of outperforming is fundamental to Canara Bank's approach, states Shri Bhavendra Kumar- Executive Director of Canara Bank.

In terms of financial performance, Canara Bank observed a significant increase, with Net Profit rising by 18.33 per cent YoY to Rs 3,757 and Global Business growing by 11.31 per cent YoY. What are the primary factors fueling this rally?

Canara Bank has demonstrated remarkable strength in the banking industry, particularly among the 12 public sector banks. Over the past 3 to 4 years, we have consistently performed well, maintaining steady growth across various parameters. In the last 2-3 financial years, our growth trajectory has remained consistent, and the current financial year shows a continuation of this positive trend, in line with our previous guidance. For instance, our net profit has increased by 18.33 per cent, and our global business has grown by 11.31 per cent to Rs 22.73 lakh crore. This growth is reflected across all aspects of our business, including liabilities and assets, highlighting our ongoing success and resilience in the market.

What are your initial comments on the RBI's new draft circular, and do you anticipate any pressure on the capital side? Is Canara Bank adequately prepared for this?

The RBI has provided initial guidance, but the circular has not been issued to banks yet. We are seeking specific clarifications from the RBI regarding the floor limit for project finance, as it remains undecided whether it will be set at Rs 1 crore, Rs 10 crore, or Rs 100 crore. Additionally, we are seeking clarity on whether SMEs will also be included in this framework. Until we receive clear guidance, Canara Bank cannot quantify the impact. Whether it's a 5 per cent or 2.5 per cent difference, we don't anticipate significant changes as any adjustments will likely be passed on to customers. We will make minor adjustments in our books accordingly. Therefore, the long-term pressure on Canara Bank is expected to be minimal.

What specific reasons led to the conservative approach in credit growth guidance compared to others?

As for our conservative approach, we refrain from making definitive declarations about our performance targets. We provide conservative guidance because historically, we have consistently exceeded expectations. Although we have projected a 10 per cent growth for the current fiscal year, our past track record indicates that we typically achieve growth rates of 12 per cent to 14 per cent in business parameters.

Therefore, while we have set a target of 10 per cent to 11 per cent for this year, we anticipate surpassing these figures and achieving growth rates in the range of 12 per cent to 14 per cent as we have done in previous years. It's important to note that our aim is always to outperform our guidance, whether it's for the public or investors. This mindset of outperforming is fundamental to Canara Bank's approach.

Have you introduced any new products targeting the younger generation, particularly those with a significant digital footprint?

Last year, on April 1, and continuing into this year, we have undertaken several digital initiatives. Our mobile app Canara One boasts more than 300 features, making it one of the top banking apps in the country. Many of our business operations are seamlessly integrated with this app, providing convenience and accessibility to our customers. Additionally, we initiated data analytics on January 1, becoming one of the pioneering banks in this digital realm. We have established a data analytics centre and implemented various strategies in this domain. 

Apart from data analytics, we are actively engaged as a partnered bank with RBI in multiple digital initiatives, including money news partnerships and SHG lending through the RBI Innovation Hub in Bangalore. Our commitment to enhancing digital footprints across various sectors underscores our proactive approach to embracing digital transformations.

What are your perspectives on the increasing dominance of AI worldwide?? How is Canara Bank integrating AI into its banking operations?

Over the past three years, we have invested close to Rs 2,000-3,000 crore in technology, particularly focusing on AI. Our commitment to technological advancement is evident in our robust AI infrastructure, where we strive to be at the forefront of innovation. Generative AI is a key area where we have made significant strides, integrating AI across various business verticals, especially in lead generation. As a large bank, we heavily rely on AI for our future growth strategies. 

We recognise that banks are evolving into technology companies, and we are prepared for this transition. Cybersecurity is a top priority, and we have established a dedicated vertical to address any potential threats, ensuring the safety and security of our operations and customers.

Disclaimer: The article is for informational purposes only and not investment advice.