With moderation in economy, there has been a slowdown in the loan growth. How do you plan to increase your core banking activity, especially advances?
Kochhar : We will watch the economy and then we will move. Current environment is such that you cannot plan too much in advance irrespective of the economic scenario. In the current scenario, we have to understand that lesser number of people are buying home, lesser corporates are jumping into starting their implementation of their projects. But all these demand would come back pretty soon. But you know the rate of movement of advance would really depend on how demand for certain of these products comes back.

Are you rationalising some of the ATMs or may be closing down some?
Kochhar: I think to put it in context, in the past, we had very few branch licences. In fact our reliance on ATMs was much more. Now we have sufficient branch licences.

When you talk about NIM (net interest margin) and returns, I am sure you are aware of the requirement of cost cutting. While PSU banks are on a hiring spree, would you also be hiring or rationalising salaries? What is your forecast as far as workforce is concerned?
Kochhar: We have a staff strength of 36,000 employees. As of now our approach is we will be re-skilling some re-training some and because our character as a bank is changing. In the past we had less branches and we were relying more on engaging outside agencies to sell our products. We had lot more people taken for sales; but now we are expanding branches substantially.

One and a half years ago we had 750 branches and one year from now, we will have 2000 branches. It also means that a whole lot selling of our products can be done through our branches rather than relying on outside agencies. That also means that we have to re-skill people. There may not be as much need for supervision of selling agencies more people needs to be trained at the branches.

So what we are doing is going through re-skilling exercise, re- training exercise and re-deployment exercise. There is still a lot of growth for people. They are seeing growth in different jobs. Now they are doing different types of jobs, they are selling deposits and other products; but they are selling from the branches.

Do we see an increase in headcount?
Kochhar: We may not increase headcount.

You had made your vision your ambition very clear. How much time you will need to become the No l bank in India?
Kochhar: I would not put time to it. We have been a very large player whether under retail finance or structure finance or project finance, So we are going to continue to play a very important role.
How fast it grows partly depends on demand for these products.
In the meanwhile what we are going to do is to concentrate on changing our deposit mix through which we can bring down cost of fund, improve our NIM and improve profitability.

How do you compare with peer group?
Kochhar: Again we have to look at different parameters. In terms of incremental lending we have been large players. In terms of asset
base, whether in retail finance or infrastructure finance, we have been large players. Yes, our NIM has not been as high as many in our peer group and that is what I am going to focus on this year.

What is your outlook for interest rate now? Where do you see banking sector as such and your bank?
Kochhar: For our bank it will move in tandem with the whole banking system. Some more correction can take place in the interest rates given where inflation is and the comfortable liquidity position.
I think that correction has come to a standstill because a large government borrowing programme was announced; but some clarity has emerged now on that borrowing programme in the credit policy itself. I think some cooling off in the market will happen, some more correction would take place.