SBI may absorb savings account rate increase

Kolkata: Even if deposit cost goes up in case of deregulation in savings bank rate is implemented, country’s largest bank State Bank of India is unlikely to recover that from its borrowing customers, said A Krishna Kumar, managing director, SBI. It is also unlikely to increase the minimum balance for the savings accounts in the days of post-deregulation of savings bank rates, unlike some of the private sector and PSU banks which are keen to recover the higher costs of deposits from the borrowers. ICICI Bank has already said that it will add the cost to its lending rates in case it has to hike the deposit rates after the deregulation of the saving bank deposit rate is allowed by the Reserve Bank of India. Moreover, SBI will try to abstain from increasing transaction charges to offset the increase in cost. It will, on the other hand, stress more on other incomes to offset the impact. “The deregulation of the savings bank rate is still being discussed. After it is in place, we will look into the measures of how to offset the increased cost of borrowing,” said Krishna Kumar.  Talking to FE he said that SBI’s objective has been to encourage use of savings bank for the common man. “I do not really believe that we are going to take such drastic steps as we are encouraging use of savings bank for the common man. It does not make any sense to again put up a charge on the customers from that point of view,” he said. Commenting on the return on assets he said that the bank has to use funds more efficiently. In 2009-10, RoA of the bank had fallen to 0.88% from 1.04%. “May be in SBI we are not doing as best as we probably can. The way forward is increasing efficiency of our operation and put more emphasis on usage of alternative channels,” he said. Accepting that the bank’s margins will come under pressure while the rates go up, he said, “We are trying to prepare our rates in such a way that it does not affect our margins too badly.” The SBI, along with its associate banks, is looking at opening another 10,000 ATMs during the financial year. The banking behemoth, along with its associates, has around 25,000 ATMs across the country. It will also open 1,000 branches along with almost 500 in rural areas during this financial year.

Provident Fund interest rate to be hiked?

Bangalore: Union Minister for Labour and Employment M Mallikarjun Kharge today said the government was looking at further hiking the interest rate on Provident Fund from the present 9.5 per cent. "We are contemplating further increasing the interest rate on Provident Fund from the present 9.5 per cent. The interest rate on Employees Provident Fund (EPF) was increased to 9.5 per cent recently. "This time also we want to give more to the employees. We are working towards it", he said while inaugurating the Southern Zonal Office of Director General of Mines Safety here. Kharge also said the Ministry was bringing in 32 amendments to the Mines Safety Act formulated in 1952 wherein a number of stringent steps would be introduced for the safety of mine workers .  The steps include increasing the penalty for violating mines safety norms from Rs 1,000 to Rs 1 lakh. In cases where a penalty of Rs 5,000 was being imposed, it will be increased to Rs 5 lakh. "Similarly the punishment (for violating safety norms) will be increased from one year to five years imprisonment and in cases where the person was sentenced to three years, it will go up to seven", he said. Kharge said the main objective of bringing the amendments was to make "all those concerned with the mines-- from the owner to the agent to the director-- accountable for the safety of mine workers". The industry also had to be alert and take precautions to avert any disaster instead of acting only after the disaster takes place, he said. "The proposed amendments have already been introduced in the Rajya Sabha and are now before the Standing Committee", Kharge said. The minister appealed to Union Minister of state for Mines, Dhinsha J Patel, who was present on the occasion to instruct the officials in his department to direct mining lease holders to accord toppriority to the safety of mine workers. Kharge said Karnataka, which was under the control and jurisdiction of earlier Southern Zonal Office based at Hyderabad, would now come under the new zonal office.  "We are also thinking of opening a regional office and also a sub-regional office here provided we get the required sites for it. We will be writing to the Bangalore Development Authority and Karnataka Housing Board on this issue", he said. Earlier, Patel said the Central government provides the guidelines for mining and it was for the state government to enforce it stringently. He said granting of mining leases also comes under the purview of the state. "It is the state which earns royalty from it (mines)," he said. Apart from bringing in amendments to the Mines Safety Act, the ministry was also considering reviving the mines which have been closed, he said.

Subbarao’s debt office view foxes North Block

New Delhi: RBI governor D Subbarao’s statement on Monday against an independent profile for the debt management office (DMO) has surprised finance ministry officials. The draft legislation to set up the office as an autonomous institution is already with the law ministry for vetting, though there is no decision yet on when it should be tabled in Parliament.  A source familiar with the developments said the RBI was involved at every stage of the plan for the DMO. “They have made their observations to the government in the course of the discussions.” The RBI, it is understood, has expressed its reservation, but “the government of India has made a decision”. Mandarins are accordingly puzzled the governor chose to go public on the issue when it was apparently sorted out. However, they refused to speculate on the development as a possible incipient turf war between the heads of monetary and fiscal policies in India. In Budget 2011-12, finance minister Pranab Mukherjee said he would introduce the debt management office Bill to handle the issuance of public debt. The RBI opposition could unsettle this promise as the standing committee on finance in the legislature could decide to stonewall the Bill in view of the differences. The DMO plan was first floated in Budget 2007-08, but got delayed over differences between the RBI and the finance ministry on the need for such an office. It was revived by Mukherjee. Once the Act is in place, the management of public debt including the floating of all government papers will be handled by the office. It will manage the registration of primary dealers and take a call on the types of papers the government should float in the debt market. When the Centre decides to float India’s debt papers abroad, the DMO will be very useful, say experts. It is expected that state government loans will also be eventually managed by the DMO. However, the government has given up its nascent plan to make the DMO a public sector entity to ensure greater control over its functioning. Rajiv Kumar, director-general of Ficci and eminent economist said he disagreed with Subbarao’s take on the DMO.  “It will optimise the performance of the debt portfolio of the government and minimise costs. The DMO is a promising idea that needs to be pushed,” he said. Government experts who have worked on the plan said the DMO will not harm the sovereign right of the finance ministry to set the quantum of market borrowing for the year in consultation with the RBI. Also, the borrowing calendar for the year, which is now issued with a six-month horizon, will also include RBI inputs. Since the draft of the Bill also envisages an RBI nominee in the board of directors of the new institution, the opposition from the central bank was difficult to understand, they said. Subbarao will, however, enjoy the support of state governments which feel the DMO will make them even more reliant on the Union finance ministry, at a time when they have to depend on market borrowing to meet their needs.

Primary dealers need a track record: RBI draft

Mumbai: Unveiling the draft paper on the proposed changes on functioning of primary dealers (PD), the Reserve Bank of India (RBI) has said it is necessary to ensure that the new PDs are adequately equipped to participate in all auctions of central government securities and T-bills, including an underwriting commitment and play an active role in the debt market.  “There is a need that the prospective primary dealers have a track record of relevant experience on which an assessment of the entity’s operational performance, control environment, and compliance position may be based. Moreover, if applicant PD is already registered as an NBFC for a year or so, the due diligence and ‘fit and proper’ criteria could be better assessed,” RBI said on Wednesday. The current guidelines to authorise PDs in the Indian G-sec market were prescribed in the year 1995 when the PD system was introduced in India.  With a view to putting in place transparent regulatory guidelines on eligibility of a PD, RBI proposed new eligibility criteria for an entity activities to become of a PD. The existing PDs would be given two years time period to comply with the minimum turnover requirement of 15% of their total turnover in the G-sec business.

Breather for SBI as RBI seeks clarification on special loans

Mumbai: State Bank of India (SBI) has got a breather on its controversial special home scheme as Reserve Bank of India has asked clarification from the bank. The communication from RBI reached SBI last weekend.  "We have received communication from RBI seeking clarification on certain issues relating to our special home loan scheme. We will send a reply by this weekend," a senior SBI official said.  The SBI had written to the RBI soon after it had raised provisioning amount on teaser home loan scheme to 2% from 0.4% clarifying that the bank's special home loan scheme couldn't be termed as teaser, and hence, the bank didn't have to provide any extra capital.  However, RBI hadn't replied to the SBI earlier and the bank has been reviewing and relaunching its scheme after end of every quarter.  SBI had conducted a high level meeting under Krishna Kumar, MD of SBI, to review the situation where the bank may have to modify its special home loan scheme. "We haven't decided anything on the scheme and it continues as it is," said the official.  Meanwhile, sources at.RBI said the central bank may ultimately ask the bank to provide at 2% for its special home loan scheme. "Our stand is very clear. Any home loan product having feature of both fixed and floating rates will fall under teaser home loan scheme. SBI product is neither fully fixed nor fully floating. The new customers of SBI are being attracted with low fixed rates but may have to pay higher floating rates afterwards. We don't want to encourage this product,'' sources at RBI said.  Soon after taking over as the new chairman of SBI, Pratip Chaudhuri had hinted that the bank’s special home loan schemes may be modified since the higher provisioning norms for such assets of 2%, as prescribed by the regulator, were beginning to hurt.  “We are continuing with the schemes at present. At the same time, we are in dialogue with RBI and will try to address the concerns of the regulator, deliver value to the customer and also make sure the provisioning is affordable,” said Chaudhuri.  Chaudhuri's predecessor OP Bhatt, who was instrumental in growing SBI's home loan portfolio with the special home loan scheme, had staunchly defended the product. Reiterating RBI’s stance that SBI’s special home loans are similar to the sub-prime loans lent in the US in the run-up to the 2008 global financial meltdown, Bhatt said this view is beyond logic as his offering is sold  to those who are “absolutely credit-worthy.”

Fin holding firm must for entering banking space

New Delhi: The government and Reserve Bank of India have decided to make it mandatory for corporate groups wanting to set up banks to ring-fence their financial sector operations from other businesses by setting up a financial holding company (FHC). For the existing financial conglomerates, however, conversion into FHC would be optional.  Officials also indicated that companies being investigated by the CBI, Central Vigilance Commission and Enforcement Directorate will not be permitted entry in the banking sector. This could dash hopes of some companies which are embroiled in the 2G spectrum scam but are known to be interested in a foray into the banking sector.  The FHC structure would help the central bank in ensuring that new banking entrant’s activities are ring-fenced from its promoters. “Holding company should ring fence the regulated financial services activities of the group including the new bank from other commercial and industrial activities of the group,” according to RBI’s draft on new banks submitted to the finance ministry. The FHC model has been suggested by an internal panel of the RBI, headed by deputy governor Shyamala Gopinath. The panel suggested to the finance ministry a number of legislative changes required to implement this model. These include removing restrictions on voting rights and empowering RBI to supersede a bank’s board, among others.  “Many legislative changes suggested by the RBI panel on holding companies and its draft on new bank licences, are overlapping. The government is trying to see how both these proposals can be handled simultaneously,” a source said, indicating why there has been some delay in unveiling the norms for entry of private sector firms into the banking sector. RBI was supposed to release the guidelines by March end. Finance ministry is deliberating on the Gopinath panel’s recommendations, as well as draft guidelines on entry of new private sector banks. The ministry has, in principle, agreed to accommodate these changes by amending the Banking Regulations Act.  A FHC structure is currently the missing link in India’s financial sector. Government panels including the Committee on Financial Sector Assessment, in its report issued in March 2009, highlighted the need for more clarity in existing statutes relating to regulation and supervision of financial holding companies. In a discussion paper on the subject in August 2007, the RBI has preferred a financial holding company model over an intermediate holding company model, as the latter is seen as less transparent and difficult to regulate. The central bank had then struck down proposals from SBI and ICICI Bank to set up intermediate holding companies. Gopinath panel’s draft would outline the central bank’s thinking on the subject. FHC are seen as an efficient vehicle to raise capital for subsidiary companies. The regulators find it easier to supervise FHCs as compared to intermediate holding companies.

Malegam report may be part of monetary policy

Mumbai: Banks and microfinance institutions (MFIs), which are eagerly waiting for the implementation of the Malegam report by the Reserve Bank of India (RBI), will have to wait till May 2 when the central bank will announce its annual credit and monetary policy.  It was expected that RBI will announce the implementation of the report in April first week. “RBI will make announcements on Malegam panel in the credit policy,” sources at RBI said.  In October 2010, RBI constituted the Malegam Committee to study the state of MFIs in the country. The committee, which submitted its report on January 19, suggested among other things capping interest rate at 24% for MFI loans.  The committee also suggested that small loans cannot exceed the Rs 25,000 ceiling and asked for creation of a separate category of non-banking financial companies (NBFC-MFI) for the MFI sector.  Finance minister Pranab Mukherjee in his Budget 2011-12 had announced creation of an equity fund of R100 crore for MFIs, which would help the cash-strapped sector to continue lending to small borrowers. Dalli Raj, CFO, SKS Microfinance, said, “We think it is a very positive report for the sector. First, it brings in regulatory clarity and it says that the RBI will act as a sole regulator for the sector.” Raj further said the implementation of the report would ensure in funding certainty, because it had reinstated priority sector status for the bank loans to MFIs. Finally, the report called for the withdrawal of Andhra Pradesh MFI Act. “SKS has not asked for any kind of restructuring of exposure of banks to the company as we have go a strong networth of R1,850 crore and our exposure to the state of Andhra Pradesh was only 25% of our total loan portfolio. Still, our concern being that banks must start funding to the sector in a big way so that it results in augmenting the credit flow from the banks to the MFI sector,’’ he said.  However the microfinance industry, which of late has witnessed slowdown in business said banks are shying away from advancing loans to them.

Gokarn to lead working group on savings

Mumbai: The government has formed a working group on savings for the 12th Five Year Plan under the chairmanship of Subir Gokarn to suggest measures to boost savings in the country. The 12th Five Year Plan begins in 2012-13.  The committee, which met for the first time in New Delhi last week, has been asked to submit its report before the government within six months from now.  Chaired by Gokarn, the meeting also was attended by officials from the Planning Commission, RBI, State Bank of India, Nabard and Sidbi. Being the first meeting of its kind, the panel asked different members of the committee to come up with their notes on various issues relating to savings like how to estimate the small savings in the future and how to bridge the savings gap and so on, a member of the committee told FE.  “We also discussed what could be the savings estimate for the proposed plan period,” a member of the committee said, and added it was also decided to form another sub-group to dwell upon financial issues on small savings.

Liquidity surplus banks park Rs. 31,000cr with RBI

The beginning of the new financial year 2011-12 has witnessed some radical improvements in liquidity scenario in the system. For the first time, almost over a year the banks have parked surplus liquidity to the tune of R31,000 crore in the reverse repo window of Reserve Bank of India.   RBI's reverse repo window pays 5.75% to the banks. The rates for certificate of deposits (CDs) also softened on Tuesday. One-year CD fell by almost 30 basis points from 9.70% to 9.40% on Tuesday. Till March end, banks had been borrowing consistently from the RBI's repo window, which has varied from over R50,000 to R1,000 crore.   Banks have raised resources through high cost deposits and certificate deposits in the past.   MD Mallaya, CMD of Bank of Baroda, said that the exact liquidity situation is likely to be good in the future. “By and large, we have entered the phase of slack season when credit demand will be less and government spending has already happened in March. Interest rates are to remain stable for now. Accretion of deposit shouldn't be a challenge in future,” he said.   On whether RBI will take measures to suck out liquidity, he said, “It is too early for RBI to take a view on the issue. It will depend on overall macroeconomic conditions.”   M Narendra, CMD of Indian Overseas Bank, said the sudden surplus may be happening as banks might have done it in a bid to go for pending deployment of credit. Few banks may go for deposit rate cuts too, he said. “But, such surplus may not continue further. Still, it is not indicator enough for RBI to take measures to suck out the surplus liquidity,” he said.   SC Kalia, executive director of Union Bank of India, said it looked like liquidity crunch should not be any issue now. During the year, a lot of deployment of funds took place on short-term basis. The surplus of liquidity was also due to the redemption pressure on MFs. “When those funds are coming, there will certainly be liquidity surplus with banks. Liquidity may be at comfort level, but not that much surplus so that it would lead to RBI taking measures to suck out liquidity,” he added.   D Sarkar, ED of Allahabad Bank, said that liquidity had improved now as lots of government funds had been released recently. “At the moment we don't feel there is any need to go for cut in deposit rates,” he said.   Net liquidity injection through LAF declined from an average of R93,000 crore in January to R79,000 crore in February 2011, and further to R68,000 crore in March mainly due to increase in government spending and consequent decline in government cash balances with RBI.  D Subbaro, governor of RBI, had said going forward, the overall liquidity situation is expected to move close to the comfort level of the RBI.

Need for an alternative to dollar: Subbarao

Mumbai: Governor of Reserve Bank of India (RBI) D Subbarao has said though it is not feasible now to find an alternative to the problems arising from a single global reserve currency — US dollar — at a global level, countries need to explore other options for protecting themselves from the vulnerabilities that they confront as a consequence of a single reserve currency.  “The problem with the world having only a single reserve currency came to the fore during the crisis as many countries faced dollar liquidity problems as a consequence of swift deleveraging by foreign creditors and foreign investors. Paradoxically, even as the US economy was in a downturn, the dollar strengthened as a result of flight to safety,’’ said Subbaro while speaking on ‘Frontier Issues on the Global Agenda Emerging Economy Perspective’ on the occasion of the 60th anniversary celebrations of Central Bank of Sri Lanka, in Colombo on Tuesday.  Based on the experience of the crisis, several reform proposals have been put forward to address the problems arising from a single reserve currency, he hinted.  “One is to have a menu of alternative reserve currencies. But this cannot happen by fiat. To be a serious contender as an alternative, a currency has to fulfill some exacting criteria. It has to be fully convertible and its exchange rate should be determined by market fundamentals and it should acquire a significant share in world trade,” he said. The currency issuing country should have liquid, open and large financial markets and also the policy credibility to inspire the confidence of potential investors. In short, the exorbitant privilege of a reserve currency comes with an exorbitant responsibility, he explained.  Subbarao also drew attention to the fact that managing currency tensions will require a shared understanding on keeping exchange rates aligned to economic fundamentals, and an agreement that currency interventions should be resorted to not as an instrument of trade policy but only to manage disruptions to macroeconomic stability.  However, he was vociferous about the fact that currency appreciation is not the only problem arising from the ultra loose monetary policy of advanced economies. Speculative flows on the lookout for quick returns can potentially lead to asset price build up. The assurance of advanced economies to keep interest rates ‘exceptionally low’ for ‘an extended period’ has also possibly triggered financialisation of commodities leading to a paradoxical situation of hardening of commodity prices even as advanced economies continue to face demand recession.  “EMEs have been hit by hardened commodity prices through inflationary pressures, and in the case of net commodity importers, also through wider current account deficits,” he said. Managing capital flows should not be treated as an exclusive problem of EMEs. In as much as lumpy and volatile flows are a spillover from policy choices of advanced economies, the burden of adjustment has to be shared, suggested Subbarao.  “How this burden has to be measured and shared raises both intellectual and practical policy challenges. Our current theory of external sector management draws from an outdated regime of fixed exchange rates and limited capital flows when the task was largely limited to managing the current account of the balance of payments. What we now need is a theory that reflects the changed situation of flexible exchange rates and large and volatile capital flows. The intellectual challenge is to build such a theory that encompasses both current and capital accounts and one that gives a better understanding of what type of capital controls work and in what situations,” Subbarao said.  The practical challenge in these matter is that once such a theory is accepted, there is a need to reach a shared understanding on two specific aspects: first, to what extent are advanced economies responsible for the cross border spillover impact of their domestic policies, and second, what is the framework of rules that should govern currency interventions in the face of volatile capital flows.

India Inc profit margins eroding: RBI

Mumbai: Increasing raw material cost and rising salary bill eroded the profitability of India Inc during April-September period of the current financial year, says an RBI analysis. According to a Reserve Bank of India (RBI) study which analyses the performance of the Indian private corporate sector during the first half of the current fiscal, sales growth was robust on the back of pickup in demand. "However, despite robust revenue growth, companies in aggregate could not generate higher profit margin primarily on account of higher input prices and rise in interest outflow," the RBI study said. It said even as the sales growth in both manufacturing and the services sector was robust during the period under review, profit growth in both the sectors was comparatively lower during the period. During the first half of the current fiscal, India Inc's staff cost rose by 17 per cent to Rs 71,133 crore, the RBI study said. The staff cost grew by 7 per cent in the same period of previous fiscal. "Generally it is observed that staff costs is higher for IT companies compared to manufacturing and services sector companies," it said. In the April-September period, the expenditure on consumption of raw materials shot up by 27.7 per cent YoY to Rs 4.36 lakh crore. "Higher input cost, that led to noticeable rise in total expenditure, vis-a-vis relatively lower revenue for companies resulted in a contraction in profit growth at the operating level," the study said.

Bank stocks shine ahead of RBI policy

The interest-sensitive financial sector stocks, led by ICICI Bank, recorded sharp-to-moderate gains on the Bombay Stock Exchange today as buyers discounted a likely hike in key rates by the Reserve Bank of India.  Strong Advance tax numbers, which indicated corporate earnings growth was on track, also supported the trading sentiments.  Mirroring the upbeat mood, the BSE banking sector index emerged as the second best performer among sectoral indices by rising 261.67 points, or 2.15 per cent higher at 12,438.34 points, helping th BSE benchmark index Sensex to close 191.05 points up, or 1.05 per cent, at 18,358.69 points. Stocks of State Bank of India, country's largest lender, rallied by 3.10 per cent to Rs 2,642.85 and Punjab National Bank rose 1.50 per cent to Rs 1,096.25.  Largest lender in the private sector, ICICI Bank spurted by 3.03 per cent to close the session at Rs 1,026.60, while Axis Bank gained 2.85 per cent to close at Rs 1,317.65 on BSE.  Brokers said expectations that the RBI may raise key rates by 25 basis point to curb inflation in its monetary policy tomorrow, which is lower than earlier anticipated, triggered buying interest in financial stocks.  In addition, reports of strong advance tax numbers, indicating strong corporate growth also buoyed the trading sentiments, they said.  Other gainers were Bank of India up by 1.20 per cent to Rs 464.40, Canara Bank by 4.08 per cent to Rs 634.45, Bank of Baroda by 1.08 per cent to Rs 909.35, Yes Bank by 4.95 per cent to Rs 278.65, IndusInd Bank by 1.25 per cent to Rs 247.85.

New bank licences will create dissonance - RANA KAPOOR MD & CEO , YES BANK

The country's newest private sector bank, Yes Bank, which started operations in 2004 has become the fourth largest private sector bank with a balance sheet of R52,000crore. RanaKapoor ,MDandCEO, is gearing up for a foreign listing together with an international launch. Kapoor tells Anita Bhoir, the bank wants to set offices in Singapore and Dubai next year. 

You have launched a Version 2.0 growth plan...In Version 2.0 we aim to become the "Professionals Bank of India" and to grow the balance sheet to R1,50,000 crore with advances at Rone lakh crore and deposits of R1,25,000 crore by March 2015. Moreover, on the cards is a pan India branch network of 750 and a workforce of 12,000. By March 2015 we would migrate from a medium sized bank to a large bank. We would like to scale up our branch banking business which includes the SME piece, micro enterprises, consumer banking and wealth management and take it to about 60% of the loan book from five% currently. The remaining 40% would be split between large and mid corporates. We also want to ensure that our borrowings from the wholesale market would be down to 7% from the current 10%.

When will you be a full service retail bank?

We will launch retail assets without a credit card offering in March 2012 with a thrust on growing liabilities. We will have marketing tie-ups with other banks to provide various loan products rather than manufacture products.

Do you have any plans to raise fresh capital?

We will raise funds to the tune of $500 million through an American Depository Receipt(ADR) by the end of next year. We are keen on an overseas listing. In 2011-12 our priority would be to set up branches in Singapore and the Dubai International Finance Centre.

What is your exposure to the MFI sector and are you open to restructuring these loans?Our advances to the MFIs, including pool buyouts, are at 0.97% of total advances, across 15 borrowers. To the Andhra Pradesh MFIs we have an exposure of about 60 crore. I am of the view that if the restructuring leads to economic value preservation we should do it. The RBI is in the process of issuing new bank licence.

What does this mean for medium sized banks like you?

New bank licenses would create dissonance. At present, there would be around 15 banks in the country that need to be reinvigorated since their brands are underutilised. In the next four years we should look at beefing up their capital. It would take about two years at least for the RBI to issue licenses and it would be sometime before they start operations. However, competition is good.

You have built a greenfield bank, would you consider existing your investment?

As and when the bank raises fresh capital there would be dilution in my holding. I am not selling my stake. Till we do not build a world class institution we would not be ready to amalgamate or be ready for a sale.

Did the global crisis throw up greater challenges for you considering you were in the growing mode?

We began operations in 2004 and it has been a dream run since then with the bank raising funds from private equity players, an IPO and a private placement. The global crisis was a shock of sorts and we focused on improving our risk and liquidity management and costs. We ensured that our management had the tenacity to handle these risks. As such, we saw a the best performance in second half of 2010-11, reflected in our revenues, margins and costs.As a consequence of those three years between2008ans2010,wearenowaleaner,efficient and agile organisation.

What steps did you take to manage the various risk?

We began diversifying our liabilities base and stepped up provisioning to ensure that we had enough of a buffer on account of our pool of profits. We brought in about 175 management cadre professionals through lateral recruitments from banks and the services sector. To manage costs, we renegotiated vendor arrangements.