We'll build a bank via organic route: Vikram Limaye

Interview with Managing Director and Chief Executive Officer IDFC

IDFC Managing Director and Chief Executive Officer Vikram Limaye speaks to Abhijit Lele about the way ahead and the execution plans for a bank. Edited excerpts:

With the Reserve Bank of India (RBI) granting a banking licence to IDFC, what is the immediate task at hand?

The RBI nod gives us visibility about the days ahead. There is already a plan in place for activities to be done in the next 18 months. The focus will now shift to execution. It will involve activities such as setting up a holding company and moving some businesses into a distinct corporate body to meet the regulatory norms.

If the plan is already in place, why should it take 18 months to start operations?

It is true we have been preparing in advance. But we do not want to rush into starting operations (such as opening branches). It will be careful and calibrated work.

How will you take the process ahead?

We will begin conversations with RBI on issues relating to execution and regulatory requirements such as priority sector lending.

What will be your business strategy, considering the highly competitive market for financial services?

We have a head start in areas such as the corporate sector. Some areas such as the retail segment are new to us. The emphasis will be on doing thorough ground work before getting into this area.

How will IDFC grow its business when it becomes a bank? Is the merger and acquisitions route on your radar?

We are not looking at growing business through the inorganic route. For now, IDFC will adopt the organic route.

What is the status on the human resource front and what are your hiring plans?

The human resource plan is ready. Now, hiring will begin for various functions and positions.

There will be a transition from a finance company to a banking entity. How is the capital position and will you inject more equity now?

With Tier-I capital adequacy of 22.5 per cent, IDFC is in quite a comfortable position to support its proposed banking activity.