You recently took charge as MD & CEO of Canara Bank. What are your priorities?
My first priority would be on the liability side, particularly Casa deposits, which are low-cost deposits. Our Casa percentage (30 per cent of total deposits) is a little low compared to peers, which we would like to strengthen and take it to 32 per cent by the end of 2026-27 (FY27).
Secondly, our RAM (Retail, Agriculture and MSME) portfolio is around 60 per cent of the total loan book. I would like to grow it because there are many benefits — better earnings, higher cross-sell opportunities, and diversified risk.
Asset quality is already good and we want to maintain that, so that credit costs remain under control.
In both short and long term, technological advancement is another focus area. The bank has already made a good foray into digital banking. I want to strengthen it further, so that we deliver a better customer experience, while harnessing the potential of our existing customer base.
What is the share of bulk deposits, and do you expect it to come down?
Bulk deposits account for around 20 per cent of deposits. We would certainly like to replace a portion of that with retail term deposits. It may not be possible to fully replace it with Casa, but our endeavour will be to gradually reduce that share.
The Reserve Bank of India (RBI) and the government announced several measures last Friday to attract foreign inflows, including a special scheme for garnering Foreign Currency Non-Resident (Bank), or FCNR(B), deposits. What impact do you expect?
The most important announcements were on FCNR(B) deposits, the extension of the Fully Accessible Route (FAR), and the dispensation regarding hedging costs. These measures are going to support foreign currency inflows.
Our FCNR(B) portfolio is around ₹9,600 crore. We are expecting at least a 20 per cent increase, which means around ₹1,000-2,000 crore.
The hedging cost is around 3 per cent. Even if banks pass on half of that benefit, customers will be immensely benefited and, therefore, more motivated to deposit.
We have a good number of branches in Kerala, Karnataka, and the southern part of the country where NRI deposits are significant. I expect we will receive a good amount of inflows.
With the RBI bearing the hedging cost, how much could FCNR(B) deposit rates rise?
The hedging cost is currently around 300-350 basis points (bps). Everybody will be interested in offering around 150-200 bps of that benefit to customers. We may not pass on the entire benefit. We would rather retain around 100 bps ourselves. But customers will be significantly benefited.
Banks have to transition to expected credit loss (ECL)-based loan loss provisioning from next year. How prepared is Canara Bank to make the transition?
We are very well-prepared on the ECL front. The draft guidelines have been around for some time and now the final guidelines are there.
There is a five-year transition period, but I don’t think banks, including us, will stretch themselves over the entire five years.
Our provision coverage ratio is around 195 per cent. There will be some writebacks of provisions as well. Our capital adequacy ratio stands at 17.04 per cent, against the regulatory requirement of 11.5 per cent. So, we are fully prepared.
What are the bank’s fundraising plans during FY27?
We have taken the board approval to raise Tier-I and Tier-II bonds worth ₹7,500 crore — ₹3,500 crore Tier-I and ₹4,000 crore Tier-II. Whenever we get an opportune time during the year and can raise funds at a good cost, we will look at raising some amount.
There has been talks around cash shortages at ATMs. Did Canara Bank face any issues?
We have around 11,000 ATMs. Around 5 per cent of ATMs may face issues at any given point due to technical reasons or other factors. The requirement for cash has come down because of UPI and QR code-based payments. People are increasingly transacting digitally. I would not say there has been any major public outcry regarding cash shortages.
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