Archana Bhargava, who took over as executive director of the state-owned Canara Bank in

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April this year, is confident that the bank will add Rs 1.25 lakh crore of fresh business in this financial year to reach a size of Rs 6.25 lakh crore by March 2012. She, however, is not keen on just focusing on the volumes but insists on quality of business too. CR Sukumar spoke with Bhargava about her plans for the bank. Excerpts:

What are your immediate priorities as the new executive director of Canara Bank?

My immediate priority is branch expansion because Canara Bank has fewer branches than its peer banks such as Punjab National Bank or Bank of Baroda. The second priority is to reorganise the branches into various circles. We currently have 34 circles and some of the circles have more than manageable number of branches -upto 180. The idea is to reorganise them into smaller circles. The next priority is to meet up with the competition. That's why we want to grow globally as well as domestically.

How do you plant to do that?

We are going to recruit around 3,000 personnel this year, which includes agriculture officers, clerical staff, chartered accountants and IT officers. In all, we have some 43,000 employees now and have a huge retirement rate. For clerical staff, the idea is to go in for local recruitment to avoid long-distance migration.

We also plan have more thrust on training the human resources. But throuh a mobile banking training team, headed by a GM-ranked officer who will move from circle to circle, instead of a centralised training activity. The training will be in the areas of customer service and computer technology. A lot of in centives are being given to the human resources to get trained.

Public sector banks are allowed to distribute one percent of their profits as incentives. We are formulating incentive schemes so that all the performing people are recognised and rewarded.

What are the business targets in terms of growth in credit offtake and deposits?

We want the bank to achieve at least 25 per cent growth yearon-year, though its difficult to maintain the growth rate as you grow. We have been successfully adding Rs 1 lakh crore of business a year in the last few years.

We have moved from Rs 3 lakh crore to Rs 4 lakh crore to Rs 5 lakh crore last fiscal. We are attempting to touch Rs 6.25 lakh crore by March 2012. Adding Rs 1.25 lakh crore of fresh business in a year is not an easy target. But the focus is not just on volume but also the quality of the business. We want to maintain our asset quality, while also maintaining our net interest margin (NIM) and cutting down our non-performing assets. So, it has to be growth with monitoring and development. It is very important that it is quality growth. Rampant growth with poor quality assets can kill.

What are your expectations on credit off-take and deposit growth for the current fiscal?

We expect at least 18-20 per cent growth in credit off-take and 22-23 per cent growth in deposits in this financial year.

The credit off-take during the first quarter of this fiscal for the industry was not encouraging.

The credit off-take was sluggish during the first quarter. But it is a normal trend. The credit offtake usually picks up in the third and fourth quarters of the fiscal.

There seem to be pressure on margins. What are your expectations on NIM for the fiscal?

There would be some pressure but we hope to maintain NIM at around three per cent upwards.

You want to grow both globally and domestically. Elaborate.

We are planning to expand to new locations in the global markets such as Japan, Bahrain, Germany, Jeddah, South Africa and the US. In Sri Lanka, Nigeria and Kenya, we have got the preliminary surveys done and we will take it forward. Currently our business from foreign operations is low key but we want to make our presence felt in as many locations as possible.