K.V.S. Manian takes charge of the bank at a crucial time when the bank is poised to press the accelerator:
Federal Bank has a recent change of guard. K.V.S. Manian, a veteran of Kotak Mahindra Bank, who was its Joint Managing Director, has taken up the position of MD & CEO of the bank, taking the place of Shyam Srinivasan, who demitted office on September 22 after a 14-year term. Manian has been a pivotal figure at Kotak Group, in its transformation from its NBFC days to the No. 4 private bank in the country.
Manian’s appointment gains significance as Federal Bank today is recognized as one of the fastest growing banks in India with a focused role in secured and small-businesses lending. Manian needs not just to strengthen the bank in this direction in order for it to make an impact in the competing scenario, but to shape the bank’s future strategies for overall growth as well.
A NEW FOCUS
In such a healthy growth scenario, isn’t the work for the new CEO is rather defined – guiding the bank on its next phase of growth. While the bank is applauded for its best-in-class asset quality, its healthy loan growth and low level of unsecured loans, Manian is tasked with strengthening the deposit franchise. Many analysts believe that he will have to face challenges in this domain. While the bank has seen a healthy deposit growth in the past, its CASA has shrunk to 29.27% at the end of June2024, from 31.85% a year ago.
LEADER IN DIGITAL
The banking sector acknowledges Federal Bank as a leader in digital banking, having adopted a digital-first philosophy – while digital touchpoints are very important, human element too is crucial. Unlike some of the top banks, which have cutting edge digital platforms, Federal Bank has developed and implemented a mobile banking platform that offers conversational banking in several regional languages, a first among Indian banks. It also has a Digital Center of Excellence, set up in 2016 and taking care of digitization of the entire payment ecosystem.
Uniquely, the bank has ‘Digital Banking Ambassadors’ and ‘Digital Angels’ to guarantee that its digitization covers all in the bank. It is a matter of pride for the bank that 90% of all its transactions now occur through digital channels. Consequently, branch staff are now more into advisory services rather than in transaction-related work. The bank’s mobile banking platform – FedMobile – is a juggernaut that handles 10 million transactions per month.
Earlier, the bank had adopted feet-on-street strategy aiming to bring banking services to remote areas of the country. But when it saw the high level of success of its digitization, it is now proposing to open more branches that offer both physical and online banking services. Undoubtedly, the priority is for a digital journey.
The bank has a self-service portal – Fed ePoint – which offers non-financial transaction services for the customers like requesting a cheque book, KYC update, and PAN, thereby reducing the time taken for non-financial transactions to less than a few hours unlike a couple of days earlier. Its ‘Feddy’, an AI-powered virtual assistant integrates multiple channels, including website and WhatsApp and has automated more a major portion of queries that were previously handled by the call center. Feddy is soon acquiring the nature of a total digital assistant for a customer. Clearly the bank is looking beyond financial transactions to boost customer satisfaction.
Federal Bank is one of the 13 pilot banks to take up the testing of the e-RUPI digital currency in 26 selected cities.
A BOOST FOR DAIRYCULTURE
The bank has partnered with a neo-banking startup, Digivriddhi Technologies, to help milk producers associated with Amul in Gujarat to get into the banking system and create cross-selling opportunity for credit and investments. Through this platform, the bank offers cash withdrawal, deposit (current account for village cooperative societies and savings account for farmers) and fund transfer services to rural dairy farmers, thereby digitizing the farmer milk payment life cycle. Value-added services like bill payment and recharges are also extended to them. The bank’s micro-ATM services enable the farmers to receive credits in their accounts and withdrawals.
MUSCLEMAN
Manian, who comes to Federal Bank after having built his business muscles over 3 decades at Kotak Mahindra Bank. He now has the responsibility to growth and strengthen the bank with new strategies. He is highly qualified for this task, with an electrical engineering graduate from the Indian Institute of Technology (BHU) Varanasi, a postgraduate in financial management from Jamnalal Bajaj Institute of Management Studies, Mumbai, and a qualified cost and works accountant. He had headed the Corporate, Institutional and Investment Banking departments along with Wealth Management. The banking industry acknowledges his role in transforming Kotak from an NBFC into a universal bank.
This article has been compiled based on publicly available information on the web, particularly the bank’s own website.
A Banking Benz
Srinivasan is known for one of his observations to a union leader upon his assuming charge of the bank. The leader wanted him to make the bank a better motor cycle, given its current state, rather than a motor car. He told the leader that he would aim to make the bank a Mercedes Benz car. He narrated this to a newspaper correspondent stating he is at least halfway through this journey. The bank has indeed grown from a regional outfit to a pan-Indian diversified financial services organization, having digitized its operations and inducted the latest in banking technology.
During his tenure, Srinivasan had taken some crucial, bold decisions, one being to reduce the bulk deposits by nearly Rs4 billion as the bank then had a CD ratio of 68%. He also decided that the bank would enter the unsecured lending market, which the bank had avoided for a long period of time. The bank had a growth of 20.3% loan growth year-on-year for the Q1FY25.
Recent Articles:
MAS’s Digital Agenda: A Conversation with Mr. Chia Der Jiun, Managing Director, MAS at SFF 2024
