RBL Bank: Apno Ka Bank Indeed!
A standout performer in the past few editions of BW Businessworld Best Banks’ Surveys has been RBL Bank (the erstwhile Ratnakar Bank). It has once again bagged the honour of being the ‘Best Growing Small-sized Bank’ in our latest Survey – the fourth in a row. You may be tempted to point it has got the benefit of being judged over a small base, but there are several others with a similar profile, which are lost in the woods; many a “biggie” offer them company these days!
Their numbers will tell you the story. Total income was up 36.46 per cent to Rs 1,309.75 crore at end-March 2016; net profit was up 41.18 per cent to Rs 292.48 crore. There was an uptick in operating expenses by 27.96 per cent to Rs 767.34 crore due to wage and outsourcing costs, branch rollout, depreciation, branding, technology and communication expenses. Basically, RBL Bank made use of the relative lull in banking to make inroads into the markets it caters to. Both advances and deposits grew by 47 per cent and 42 per cent Rs 21,229 and Rs 24,349 crore, respectively.
During fiscal 2016, gross NPAs were up at 0.98 per cent (0.77 per cent) while net NPAs stood at 0.59 per cent (0.27 per cent). The higher dud-loan ratios were due to a weakness in global trade, reduction in commodity prices, elongated working capital and payment cycles and uneven growth in the domestic economy. It needs to be pointed out though the ratio of gross NPA and standard restructured assets to gross advances fell to 1.06 per cent (1.3 per cent).
Tomorrow’s World
RBL wants to tap into the intersection of entrepreneurs, ideas, technology and banking services. To evangelise entrepreneurs, the bank set up a dedicated branch for startups in Bengaluru to support early-stage companies with a basket of banking services.
“Through the Entrepreneur-in-Residence programme, startups can test their ideas on our platform, with us as their first customer. We also plan to run joint pilots with these startups and get into long-term partnerships with them,” says Vishwavir Ahuja MD & CEO, RBL Bank.
Even as the bank handholds startups, it is aware on its home-turf, newbies are poised to rewrite the rules of the game. Ahuja points to the disruptions in the banking landscape – newer technologies and business; emergence of significant competition from new banks and non-banks (telcos, fin-tech and e-commerce). Then, you have the pressure of dud-loans and significantly impaired balance sheets of several large banks.
“We are living in a Vuca (volatility, uncertainty, complexity and ambiguity) world. To respond to these challenges and exploit the opportunities, how should we position ourselves? How should we ‘change gears’ so as to emerge as a highly-responsive organisation yet strongly rooted to its core spine? Part of the answer lies in the belief that, sometimes larger organisations tend to have bigger challenges and often create an opportunity for smaller, more focused and nimble players like us to come to the fore”, points out Ahuja.
Ahuja and RBL’s senior crew drawn largely from foreign, private banks or financial institutions have made a point. Few in their past avatars have held a job that even remotely answers to their current calling cards – which is to cater to the small guy who resides in any of the businesses that range from wholesale to retail banking.
They have made it Apno Ka Bank!
