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MUMBAI : Karnataka Bank Ltd is tying up with fintechs and implementing end-to-end digital solutions as it looks to turn a “digital bank” by its centenary year in FY24, said managing director and chief executive officer Mahabaleshwara M.S.
The tie-ups with fintechs for underwriting retail, MSME and corporate loans have reduced operating costs and improved efficiency, Mahabaleshwara said in an interview. The South-based bank is now looking to bring 80% of its retail loans up to ₹5 crore under digital by March 2024.
“Next year is our centenary year. By the turn of the first century, we would like to emerge as a digital bank. Not only in credit, in each area of banking and back-office functioning, I’m trying for end-to-end digital solutions. Once efficiency enhan-cement in onboarding the customers is achieved by adhering to the quality standards, then my risk management department will continuously do assurance check,” he added.
As part of its centenary year preparations, Karnataka Bank is looking to start operations in the Gulf and enter the wealth management business. The bank is starting an analytical centre of excellence in partnership with Ernst and Young from 1 October, aiming to harness digital capabilities to drive decision-making. The bank is targeting a 10-15% growth in balance sheet, which is currently at ₹94,541 crore.
“I’m not aggressive in growing the balance sheet. My aggression comes in growing fundamentals like accelerating provisions. We are looking at 10-15% growth in balance sheet,” he said.
At its annual general meeting held in August, Karnataka Bank’s shareholders rejected a resolution to raise capital worth ₹1,000 crore through a qualified institutional placement this year.
According to proxy adviser IiAS, the bank will need to issue 135.7 million shares to raise the entire ₹1,000 crore, which will result in dilution of 30.4% of the expanded capital base. Mahabaleshwara said the bank will approach investors to understand their concerns.
“This time for QIP issue resolution of the AGM, all the proxy advisors had recommended ‘For’ voting. In spite of that, 3 FPIs voted against it. We have to reach out to their custodians to address their concerns,” he added.
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