What are the difficulties faced by you in the current market scenario?

The fiscal steps and the Reserve Bank of India's [Get Quote] monetary measures will increase the costs substantially as we are losing interest on the lendable funds. The overall costs are going up and the repo rate hike will add to the cost of resources. The rise in costs will be passed on to the customers and the net interest margin will continue to remain at 2.93 per cent.

What do you expect on the growth front, given the prevailing bearishness?

We expect 25 per cent growth in business as of now. The top line growth for the full year will be 20-22 per cent. I do not see any correction in growth.

What makes you so confident of sustaining the momentum?

We have put initiatives in place. We have launched the core banking solution, which should lead to an improvement on the liability front (deposit raising). We have also formed teams for marketing financial products. The bank opened 125 branches last year and will open 91 more branches by September.

Is the pace of expansion enough to stay on course?

We have seen a growth in low cost deposits from CASA (current and savings accounts) and retail term deposits in the first quarter. The share of CASA in the total deposit base has moved up to 36.35 per cent as of June 2008 from 35.65 per cent in March 2008. The CASA growth gives me lot of confidence in times of high interest rates. In the current financial year, we will try to reduce our dependence on bulk deposits and improve our retail term deposit base. This will result in moderation deposit costs.

Is corporate lending slowing down?

Corporate lending has not slowed down. There is no slowdown in manufacturing and services. The consumer loans and housing sectors have moderated slightly. But the demand is not as high as it was two years back, when credit growth was almost 30 per cent. The overall credit demand is not likely to come down.

How do you plan to improve the asset quality?

We are looking at opportunities. Fee-based income has gone up by 25 per cent in the first quarter from 14 per cent last year and we would like to push it up further. We are also reducing slippages. Loan delinquency has been brought below one per cent. Credit monitoring needs to be emphasised. We are doing trend analysis so as to prevent bad accounts.