We have won Ranji, now we have to play test matches: Federal Bank MD & CEO

Federal Bank has to enter the league of big private sector banks in the next 7-10 years, says KVS MANIAN, MD & CEO, Federal Bank. In a face-to-face interview with Manojit Saha and Subrata Panda in Mumbai, he talks about mid-yielding assets being the focus area of the lender, along with boosting fee income and strengthening the current account deposit base. Edited excerpts:
You took charge in September last year. What is the vision you have for the bank?
Federal Bank as an old private sector bank is leagues ahead of most of the banks. It has done the best in this cohort of banks. But it has not reached the cohort of the large private sector banks. We want to be the fifth largest private sector bank, which puts me in the big league of the private sector banks. We have 18–20 per cent market share in Kerala... it has a huge regional strength and now we want it to be a more nationally recognised bank. We are halfway there, but we want to be fully there.
What are the biggest challenges you face?
Declining interest rates are a challenge for all banks. Broadly, if the interest rate was in the upward cycle, many of the initiatives I want to do would have been easier, but in this environment there is a downward pressure on the yields. Secondly, the brand, the team, and the people have to make the transition from playing the league matches to test matches. We have won the Ranji Trophy, but now we have to play the test matches. This is the main job to be done.
Where do you see your total business in the next few years?
Overall, we should be growing in the mid to late teens, depending on the market environment.
Which are the areas where you want to improve?
We are looking at three areas- first we have to get the liability story right, and particularly, the current account story right. Our current account is at 6 per cent of our deposit base. For most banks, it is in the order of 12–15 per cent. So, we would want the 6 per cent to grow to 10 per cent and beyond. If we get this right, it solves our cost of funds problem, changes net interest margin, among other things.
On the asset side, our credit culture is very good. Our cost of credit has been reasonable. There is a DNA of the bank in terms of what risks it takes. I do not want to revolutionise it, but evolution is good. Overall our book currently is low risk, low yield. I would want to shift it to medium risk, medium yield. If I try to do much, it will become revolutionary and I do not want to derail it. It is a strong point of the bank. So, we are focusing more on loan against property (LAP), used commercial vehicle financing such that the risk does not change significantly, but the yield is higher. So, the second thing I am focusing on is moving the bank to a medium risk, medium yield business.
Thirdly, we want to improve our fee income. If you benchmark us, we have a gap from the big players. Fee income largely is trade forex, wealth management, card fees, etc. So, there are opportunities to grow this. We want to grow fee income by 25–30 per cent run rate.
What is the strategy you have adopted for your corporate book?
We will go after the mid corporates. We do not want to go after the really large ones. Given our cost of funds, we can be competitive in the mid-market segment. At the very top end, the pricing gets too fine, and we do not make money, and we do not get any cross sell. But in mid-corporates, we will be relevant, and we will get the current accounts of those companies, trade, forex, etc. Overall also, we are focused on SME and small businesses.
Where do you want your retail corporate mix to be?
Currently, 60 per cent is retail and we want to increase it to 70 per cent in the next 2-3 years.
Your home loan growth has been slow…
I have to overall balance my growth such that my medium yielding assets grow faster, and low yielding assets grow slower and home loans sit in the low yielding assets so I will grow them slightly slower. We will be opportunistic about the high yielding assets if the environment clears. Credit cards will grow, and we will continue to grow that. Personal loans, and microfinance loans we will judge the market and credit quality and take a call. My sense is for another two quarters microfinance will see some pressure.
Are you open for inorganic growth in the microfinance segment?
In general, we are open for inorganic growth. Having said that, we will never have our microfinance more than 5 per cent of our book. I am not a fan of the barbell kind of strategy. Microfinance is a segment we will be in but we will moderate our ambition. Also, our overall unsecured book should not be more than 10–15 per cent of our book in our medium term.
What is your strategy for your credit card portfolio?
We just have a little over 1 per cent market share in credit cards and we want to drive it to 4-5 per cent in 3–5 years. We also want to make sure that our sourcing is balanced. We work with fintechs for sourcing cards, we do co-branded cards, and organic cards. Currently, our organic cards are lower than our fintech sourced cards. We want to have 50 per cent organic cards, and 50 per cent sourced from fintechs. And organic cards will be to our existing customers largely. Cross sell to our existing customers is quite low currently. As we acquire more customers, our opportunity to cross will be more.
What are your plans for wealth business, especially from the NRI side?
Our NRI asset under management (savings accounts + term deposits) is close to ~90,000 crore. But we do not have their wealth business because historically we are not focused on their wealth side of business. So, there is a huge opportunity.
When I talk about wealth business, I am not referring to private banking. I am talking about the mass affluent segment, where products are simpler.
Do you want to get into the AMC business?
In the medium to long term, yes. But not in the short term. Our journey to be a universal bank is perhaps a decade-long journey.
So, the journey to be a large private sector bank is a decade-long?
It's a 7–10 year journey.
What are your branch expansion plans?
Forty per cent of our current branch network is in Kerala. And 60 per cent is outside Kerala. It's not that we are only Kerala centric. We are no more a regional bank. We will follow adjacent states' strategy when it comes to branches. Adjacent states of Kerala are Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra.. we will grow the brand here. Then we will look at the top 10 GDP states and grow there. Thirdly, we will also focus on the big metro markets. We will follow this strategy for the next 3–5 years. We will get to about 2,000 branches in three years.
What is your gold loan strategy?
The new draft circular on gold loans is quite robust, and it is in line with the practices we follow. The earlier circular was tighter on some of the things and impacted our volumes. Now, we will get back the growth trajectory in our gold loan business.
We are awaiting RBI's final guidelines. From our point of view, we are somewhat unique because both of us are listed. Right now, there is no decision.
We have 26 per cent stake in the company, and we have an RBI approval to take it to 30 per cent. The application to the insurance regulator is in the process.

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Time of India

a day ago

• Time of India

'Savings Ki Vidya' campaign by Federal Bank: A fresh approach to savings'

Savings Ki Vidya: A Category Breakthrough Campaign This witty and insightful campaign features brand ambassador Vidya Balan in a refreshing new avatar Federal Bank , a leading private sector Bank, launches its latest integrated marketing campaign titled Savings Ki Vidya , to prime up its deposit books. The new campaign 'Savings ki Vidya', featuring acclaimed actress and brand ambassador Vidya Balan in a refreshing new role , carves out a Category space in the Consumer's mind by setting up a r efreshing narrative for savings aka deposit mobilization. The campaign elevates the Rishta Aap Se Hai, Sirf App Se Nahi R storyline, reinforcing that when it comes to smart saving, great service and meaningful relationships create lasting value. It captures slice-of-life moments, where 'it skips our mind', and someone who loves us nudges us to save smart in each of those moments. The campaign stars the versatile Vidya Balan who brings her signature authenticity and charm and wit to guide her friends toward smart saving choices. The humour in the campaign cuts across demographics and geographies. The unambiguous takeaway is, all good things begin with savings, the inception of which is in a 'Rishta' with Federal Bank. 'Savings Ki Vidya, shifts the narrative to long-term relationships with Federal Bank, which is known for its great service. Opening a savings account with us is the beginning of all things you may want to do thereafter. The campaign steps aside from tactical conversations around product features or interest rates and owns the 'act of saving'. This allows for an origami kind of a model, where at different points in time, sprint runs of specific aspects of savings/current account or card features or interest rates for specific segments can be amped up. You simply can't miss 'The Vidya' for a moment in this warm, witty and winning narrative. The campaign is a tributary to Federal Bank's core essence, 'Rishta Aap Se Hai Sirf App Se Nahi R , and reflects on the strength of the Bank's team and their ability to deliver service excellence – that's the calling card to opening accounts with the Bank. Ms. Vidya Balan, our brand ambassador , made it easy to occupy the space of conscious decision making, through referential 'knowledge'. In many ways, she is alluding to her own experience of the brand, which began when she became a customer first and the many interactions with our team thereafter over the past few months. The authenticity of emotions and experiences Vidya has felt is seen in the happy storytelling. Savings ki Vidya is a multi-bit handle and various accessories can be locked basis the need of the quarter for building the deposits narrative and shoring up business,' said M V S Murthy, Chief Marketing Officer from Federal Bank . 'Federal Bank is maxing the potential of working with me as their ambassador. The witty word play around my name is almost serendipitous, given that knowledge helps us make smart choices that lead to prosperity, and it's the everyday moments that make this campaign relatable. A simple storyline which reinforces that those who care about us look out for us. I've experienced the Federal Bank ethos of Human at the Core and Digital to the Fore firsthand when I opened an account with them, which showed me that they mean it when they say, Rishta Aap Se Hai, Sirf App Ae Nahi.R ' said Vidya Balan, Bank's Brand Ambassador. The films are supported by an original music score, specially curated to reflect the campaign's tone — playful, modern, and rooted in everyday life. 'Savings ki Vidya' is a 360-degree campaign, with visibility across TV (TVC), Digital and social media, Outdoor (OOH), Print advertisements, Branch-level activation and branded merchandise. Additionally, the films will be dubbed into multiple languages to ensure wider reach and resonance with diverse audiences. The media plan promises to create a significant buzz across platforms. The link to the video ad: Savings Ki Vidya - Efforts Aur Paise Donno Bachao Savings Ki Vidya Efforts Aur Paise Donno Bachao Savings Ki Vidya Koi Tujhse Seekhe Savings Ki Vidya Koi Tujhse Seekhe About Federal Bank Federal Bank (NSE: FEDERALBNK) is a leading Indian private sector bank with a network of around 1589 banking outlets and 2080 ATMs/Recyclers spread across the country, and the Bank's total business mix (deposits + advances) stood at ₹ 5.18 Lakh Crore as on 31st March 2025. Capital Adequacy Ratio (CRAR) of the Bank, computed as per Basel III guidelines, stood at 16.40 % as on 31st March 2025. Federal Bank has Representative Offices in Dubai and Abu Dhabi that serve as a nerve centre for Non-Resident Indian customers in the UAE. The Bank also has an IFSC Banking Unit (IBU) in Gujarat International Finance TecCity (GIFT City). Federal Bank is transforming itself, keeping its principles intact, into an organisation that offers services beyond par. It has a well-defined vision for the future as a guidepost to its progress. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now

Time of India

5 days ago

• Time of India

Karn emerges costliest player, roped in by Noida for Rs 17.5L

Lucknow: Indian legbreak googly bowler became the highest paid player in the mini auction of UPT20 league when he was picked by Noida Kings for Rs 17.5 lakh on Wednesday. His base price was Rs 5 lakh. Tired of too many ads? go ad free now Six franchises participated in the first mini auction of players for the third edition of UPT20 league. In all, 210 players were registered from UP. The players included those who play for Railways but have domicile in UP. For this, Uttar Pradesh Cricket Association (UPCA) had asked for permission from BCCI to allow inclusion of Railways players who were outside the competitive cricket for 12 months and whose domicile was from UP. Total 10 players from Railways, out of 45, were picked by the franchises through open bid auction. Six teams in aggregate will pay around Rs 2.8 crore to these players. Right arm medium pacer Kartik Tyagi, whose base price was Rs 5 lakh became the second highest-paid player after he was roped in by Meerut Mavericks for Rs 16.25 lakh. Upendra Yadav from Railways became the third highest-paid player who was taken in by Kashi Rudras for Rs 13.5 lakh. Right hand batter Shivam Chaudhary from Railways was roped by Noida Kings for Rs 10.75 lakh. Uvais Ahmad (25), who had batted brilliantly for Meerut Mavericks in the inaugural season, was picked by the same team for Rs 20 lakh against the base price of Rs 2.5 lakh. Besides, batter and wicketkeeper Shoaib Siddique was roped in by Lucknow Flacons for Rs 10 lakh. "The UPT20 League has evolved into a premier platform for showcasing domestic cricketing talent. Tired of too many ads? go ad free now With Season 3, we are witnessing unprecedented enthusiasm from players and franchises alike. The auction is not just a selection process — it's a celebration of opportunity, aspiration, and the future of Uttar Pradesh cricket. I am confident this season will set new benchmarks in professionalism, talent discovery, and fan engagement," said BCCI vice-president Rajeev Shukla. Chairman, Governing Council of UPT20 league, Devendra Chauhan said, "In the third edition of UP T20 League, we have introduced a new feature that players who are domiciled in Uttar Pradesh and play in the Ranji Trophy for the Railways have been included. There are about 11-12 such players whose domicile is in UP, and they have been permitted by the BCCI. As a result, there was intense bidding which will enhance competition, create rivalry, and generate attraction for UP. " "Players selected through talent hunts conducted by the franchises in various districts and camps were given Rs 1.5 lakh in the last season. Their remuneration has been increased to Rs 2 lakh as these players do not get opportunities elsewhere," he said.

Indian Express

14-06-2025

• Indian Express

PU's UIAMS sees highest package of Rs 16.42 LPA, average of Rs 6.84 LPA

As many as 87 MBA students at the University Institute of Applied Management Sciences (UIAMS), Panjab University (PU), Chandigarh, have secured campus placements, with 9 of them receiving an impressive Rs 16.42 lakh per annum (LPA) package, the highest package for the institute students this season, with the average being Rs 6.84 LPA. The placement drive witnessed participation from 26 leading companies across diverse sectors, including banking, finance, IT, insurance, marketing, and consulting. Federal Bank, Mahindra Finance, Capgemini, Bunge, Tirupati HealthCare, SBI Mutual Funds, HDFC Life, Policy Bazaar, Growwtide, and Vodafone Idea, were some of the major recruiters. The recruitment season saw companies offering roles such as management trainees, sales executives, relationship managers, business development managers, client consultants, and HR analysts to the students. Notably, Federal Bank emerged as the highest-paying recruiter, offering nine positions with the highest offer being 16.42 LPA. Federal Bank has been recruiting UIAMS MBA students since 2012. Mahindra Finance, another regular recruiter, offered Rs 10 LPA to three students. Appreciating the placements, PU Vice-Chancellor Renu Vig said, 'students of various departments of the PU continue to shine academically and professionally. The remarkable placement outcomes reflect the strength of our academics and the employability of our students. I congratulate the placement team, teachers, and students on their achievements'. UIAMS Director Anupreet Kaur Mavi has congratulated the students and the placement team, stating, 'we are proud of the career paths our students are embarking on. The numbers of placements reflect the quality of education and the institute's growing reputation among recruiters'. Dr Amandeep Singh Marwaha, training-cum-placement Officer, UIAMS, expressed his appreciation for the students' efforts and acknowledged the continued support of the industry partners. 'Our focus has always been to align academic excellence with industry expectations. This year's placements reflect the quality, resilience, and preparedness of our students,' Marwaha said.