South Indian Bank In Pact With Insurance Firm

The Kerala-based South Indian Bank Ltd (SIB) has tied up with an insurance player for distributing the latter's product. SIB has also formed an alliance with a private sector bank for sharing its automated teller machines (ATMs) in the country.

Speaking on the sidelines of the Bank Economists' Conference (Becon) here, SIB chairman A Sethumadhavan declined to name the company and the bank, as in both cases the final memorandum of understanding (MoU) was yet to be signed.

The insurance company, "is one of the new private sector life players incorporated with a foreign partner" was all he would say.

 

For its ATMs, -- Sethumadhavan also declined to name the bank -- the process has recently been initiated and the final agreement is yet to be signed. The partner bank has presence in metros and at present has some 100 ATMs located in strategic locations in the metros, outside Kerala.

SIB has also targeted 100 ATMs in another three years. This will take the number of ATMs accessible to its clients to more than 100, because the bank with which SIB has tied up also has targeted to increase its ATM network, Sethumadhavan said.

SIB, with ICICI as its largest shareholder at 12 per cent, has struck a strategic alliance with billjunction.com, an ICICI subsidiary, for utility payments such as telephone, mobile and electricity bills, and insurance premium deposit.

On the operational front, the bank has targeted deposits of Rs 6,300 crore, while advances have been pegged at Rs 3,700 crore for the current year. "We have been cautious all through the past 75 years of banking history and would like to grow at a modest 25 per cent per annum," Sethumadhavan said.

"This was one of the reasons we opted against investing in the capital markets," he added. This time, the bank hopes to post a profit of Rs 55 crore against Rs 41.5 crore in 2000-01.

SIB has also embarked upon a technology drive where it plans to connect 150 key branches by 2004 at a total investment of Rs 40 crore. With as much as 36 per cent of the deposit base from NRIs, the thrust on technology banking was overdue, he said.

The technology infusion would enable the bank to launch a few new products, such as internet banking and phone banking. The bank is also in the process of expanding its branch network by 13 this year.