ICICI Bank aims high in Lanka

Hiran H. Senewiratne

ICICI Bank

fact file:

ICICI Bank was originally set up in 1955 as a development financial institution. In mid 1994 ICICI Limited set up the ICICI Bank. In 2002 it went into retail banking has now one of the largest retail bank in India with a market share of 30-35 per cent.

The bank as a whole has a balance sheet of US$ 90 billion. Where the international banking is concerned it accounts for US$ 23 billion. In terms of market capitalisation, ICICI is the largest bank in India and one of the top ten banks in the world.

The ICICI Bank, one of the growing international banks in Sri Lanka, has achieved all targets within a short span of two years, its Country Head- Sri Lanka Prem Kumar Thampi said.

Speaking to the Daily News Expat Chit Chat, he said Sri Lanka being a growing market in the region prompted them to start in Sri Lanka.

“With the growth of the Sri Lankan economy in the region and its growth potential, ICICI Bank has many plans to expand its operations in the country within the next few years to be one of the top foreign banks in Sri Lanka,” Thampi said.

He said they have adopted a strategy to compete with other banks in the country, which would enable the bank to be one of the top foreign banks in the country within the next few years. The Government should address high interest rates and inflation to contain the banking sector.

The escalation of international oil prices will have a negative impact on the economy as Sri Lanka depends heavily on oil. Therefore it is better to go for alternative energies and energy saving mechanisms to control inflation in the medium to long term perspective, Thampi said.

* What made ICICI Bank to set up in Sri Lanka in 2006?

We saw Sri Lanka was growing at around six per cent. Obviously Sri Lanka is a preferable destination in the SAARC region for investment. We have branches in Pakistan and Sri Lanka and our target is to be the best foreign bank in Sri Lanka within the next four to five years with around US $ one billion in the balance sheet.

To compete with major local banks we have our own strategy in the medium to short term perspective.

* What is the current status of the ICICI Bank in Sri Lanka?

We set up our bank in 1996 and we mainly focus on retail and corporate banking businesses. We started our bank in Sri Lanka with US$ 25 million, which was the minimum requirement stipulated by the Central Bank.

Today we are the third foreign bank in Sri Lanka in terms of balance sheet with US$ 280 million.

We are the only bank to offer free of cost Automated Teller Machine (ATM) VISA withdrawals. Today, we have a more than 8,000 customers which is growing.

* What are the plans for 2008?

We want to go beyond Colombo and are looking at other potential areas to set up branches both within and outside the Western Province.

We have applied to the Resource Bank of India for approvals to increase the branch network in the country and once we obtain approval we will open branches with the approval of the Central Bank of Sri Lanka.

This year other than branch expansion work, we are working with the Central Bank to introduce a Commodity Exchange Centre like the Colombo Stock Exchange for commodities.

ICICI Bank is also working with the Securities and Exchange Commission to develop securitisation markets.

* How do you see Sri Lanka’s business economy for the banks per se?

I see that the Sri Lankan Banking sector is growing and it has a lot of opportunities to launch new products and services to retail and corporate banking. With all new developments the banking sector is moving towards a healthy position. The Central Bank is also doing a good job to improve the quality of the industry by promoting good Corporate Governance and the Basel rule and 10 per cent capital adequacy ratio for banks.

* Your company/ bank is a foreign bank with a 8,000 customer base. Therefore how about the non-performing loan ratio?

It is a function of how one should chose customers for the bank. We choose our credit selections after good study at present we have a zero non-performing ratio.

* Any plans to introduce new products to the retail or corporate banking sector?

Yes! We are very strong in the remittance market in India with a market share of 35 per cent, which is worth more than US $ 30 billion.

We are looking at Sri Lanka which is worth around US$ three billion. Therefore we are going to attract the Sri Lankan remittance market specially in the Middle East, UK and Canada.

* What are the problems encountered by the banking sector in Sri Lanka?

The economic situation in the country creates problems with high interest rates and inflation. Therefore, it is difficult to manage banks with high interest rates and inflation because banks have to grow higher than inflation and interest rates in this competitive market.

* Do you mostly recruit Indians or Sri Lankan employees being a 100 per cent Indian Bank?

We have only a few Indians. Most of our employees are Sri Lankans and we provide a lot of training and development activities for our employees. We are sending 10 employees for an international management programme in India. Our management structure is very flat and flexible which is an excellent learning organisation.

* What is the difference between the Sri Lankan corporate and Indian corporate sector?

We know that India is one of the fast developing countries in the world and our corporate sector and companies are very dynamic and aggressive than Sri Lankan companies. Therefore Sri Lankan companies have to be more dynamic and aggressive to be competitive in the region.

* You have been in Sri Lanka for quite sometime. How do you see Sri Lanka? Where do you like to spend your holidays here?

The first impression on Sri Lanka is that it is a beautiful country with plenty of growth potential in tourism and IT services.

Sri Lanka should capitalise on those areas to develop the country. I like to visit Kandy. The Pinnawala Elephant Orphanage and Nuwara Eliya are some of my favourite places.