SMALL WONDER

With a strategic push towards low-cost deposits, this small bank is betting on the lucrative retail and MSME segments

- RIDDHIMA BHATNAGAR

TAMIL NADU-HEADQUARTERED The Karur Vysya Bank's (KVB) goal is to prioritise retail and MSME loans with an emphasis on yields and granular loan book diversification. It also aims to maintain robust collection and recovery mechanisms to uphold asset quality.

Currently, the bank's commercial portfolio stands at 33%, with standalone MSME at 23% and retail also at 23%. In retail, housing loans and mortgage (loan against property or LAP) loans account for the big segments of the entire retail loan book-at 45% and 21%, respectively.

However, in the cut-throat retail and MSME segments, there are big players to wean away customers. It is for this reason that the bank is focussing on lowcost current account and savings account (CASA) deposits. The bank's CASA ratio stood at 29% as of September 2024, lower than the average for most private sector banks.

Foreseeing a challenge, KVB established an exclusive sales vertical for accelerated acquisition of new-to-bank customers in the Liabilities segment through an increase in 'Feet on Street' marketing activity.

It has adopted a segmented approach with exclusive sales teams focussing on separate segments. MD & CEO B.