Indian banking looking at better days ahead: RA Sankara Narayanan, MD & CEO, Canara Bank

“A $5 trillion economy requires bigger banks and the PSU Bank merger move by the government will definitely give strength,” said RA Sankara Narayanan, MD and CEO, Canara Bank in an interaction with ET Now.

ET Now: Do you see the advantages of this merger?

RA Sankara Narayanan: Major advantage of consolidation is the size. A $5 trillion economy requires bigger banks and this move will definitely give strength. The government also has announced capital infusion to all the banks including us. So, compared with the industry we will be somewhere around 13% CRAR and combined CASA is better and combined net NPA is also lower than 6%. We are very confident this will add value not only for regulatory compliances but also for growth.

ET Now: When is the bank board likely to take up this decision what has been announced today?

RA Sankara Narayanan: Today only we got the update and we will be going to the board in the next seven or ten days’ time.

ET Now: When you say that efficiencies will be brought in, how will you look at bringing in efficiencies?

RA Sankara Narayanan: The idea is to have the best of the manpower from both Canara and Syndicate Bank put together. Both the managements will sit together and identify the right people for the right jobs and 10,300 branches.

ET Now: Canara Bank will be getting Rs 6,500 crore from the government, how are you planning to use these funds?

RA Sankara Narayanan: Actually I need capital. I was planning to raise equity. With this, I am confident that at least for the time being, we do not require any additional market-related capital raising whether on equity or debt side. So, that is definitely close to 13% CRAR and it is what we are looking at.

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ET Now: The PJ Nayak Committee had also recommended a lot of reforms. How is it going to empower the bank boards more importantly?

RA Sankara Narayanan: The board of directors are now to review the performance of the general manager and above including managing director. This will lead to definite value and succession planning as well as better risk management followed by more positive governance. I think Indian banking is looking for better days ahead.



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