Trust transparency and a commitment to the highest standards of ethics and governancedefine the KBL ethos. This has been the guiding principle which has directed the Bank andits Board members to carry a 96 year legacy with great responsibility.
It has been a great satisfaction personally to discharge my duties as Chairman of theBoard at Karnataka Bank particularly when the institution is nearing its centenary yearand is forging ahead on a major transformation journey of a mammoth scale largely drivenby an internal team.
The year was marked by overall improvement of all operating parameters strengtheningof the balance sheet and various strategic initiatives to build KBL as a 'Bank of theFuture.' As one of India's first generation Private Sector banks with 96 years of bankingwisdom KBL has emerged as a 'time tested' and trusted 'family bank' to millions ofcustomers across the country.
2019-20 the Global Economy which exhibited early signs of a turnaround with economicrevival in South East Asia Latin America and Middle East slid into slowdown beset withthe problems of geo-political tensions protectionist trade policies volatile oil pricesand muted market demand.
The Indian Economy also trailed on a sluggish track with GDP plunging to a 7 year lowat 4.7 per cent in the second quarter of the year on the back of decline in growth in coreindustry sectors weak rural demand and stress in the financial markets. The Government'sslew of supportive measures to revive the economy helped to bolster growth in the thirdquarter until the pandemic lockdown in March 2020 brought all economic activity to astandstill. While Global GDP decelerated to -3 per cent the domestic economy plunged to1.9 per cent.
As per RBI data Bank credit growth decelerated to an over five-decade low of 6.14 percent in the fiscal ended March 31 2020 as against 13.3% in 2019 amid a falteringeconomy and lower demand. Advances growth was slowest since the fiscal ended March 1962.In the week ended March 20 2020 advances stood ar Rs 103.71 lakh crore as against Rs97.71 lakh crore as on 29 March 2019. Bank Deposits grew by 7.93 per cent to Rs 135.71lakh crore compared to Rs 125.73 lakh crore in 2019.
For the past few years the banking system in India has witnessed major upheavals withlegacy problems of NPA's and large exposures creating systemic stress and credit pressure.The Government's various regulatory measures and policy initiatives including theimplementation of the Insolvency and Bankruptcy Code (IBC) with timelines for earlyresolution have ushered in a major change in terms of discipline and accountability inthe banking ecosystem. Amalgamation of Public Sector Banks and the Ease 3.0 Reforms Agendaof the Ministry of Finance Government of India for 'Tech Enabled Banking' hasaccelerated the process of digitalization of banking services and laid the framework for'responsible banking' 'customer responsiveness' faster 'turn-around-time' and 'ease ofbanking'.
With the Government of India's focus on 'Make in India' initiative financial inclusionand farmer support programmes MSME and industry development plans infrastructurepipeline projects and the country emerging as a favoured destination for most Globalmanufacturers the potential for growth is considerable. So is the opportunity for thebanking industry.
Digitisation Artificial Intelligence Big Data Analytics - the banking landscape ischanging rapidly. At KBL adaptability to change has always been a main strength. Astrength that has enabled the Bank not only to be resilient but also to stay ahead of thecurve. Keeping pace with the disruptions and changing technologies the bank has embarkedon KBL-Vikaas a major transformation journey partnering with techno consultants andfintech companies to emerge as the 'Bank of the future.'
KBL is embracing new generation technologies to deepen its customer engagement withinnovative and futuristic digital products and services that define New Age banking.
Changing business dynamics mandate a prudent risk management framework and strongwell-established banking practices. In line with this KBL's 'Compliance First BusinessNext' approach has enabled the Bank to build a strong core free from balance sheetvulnerabilities.
Despite the challenging business environment KBL worked with great diligence to futherstrengthen the fundamentals and to create long term value for all its stakeholders.
Trust transparency and a commitment to the highest standards of ethics and governancedefine the KBL ethos. This has been the guiding principle which has directed the Bank andits Board members to carry a 96 year legacy with great responsibility. I thank all mycolleagues on the Board for their support and guidance in helping to carry this legacyforward.
I wish to also thank all our shareholders for their continued support and trust in KBLas a dependable banking institution of repute and helping us to forge ahead with renewedvigour towards our centenary milestone.
With warm regards
P Jayarama Bhat