CSB Bank to invest Rs500 cr in technology in two yrs, says CEO & MD

Kochi: The Thrissur-headquartered CSB Bank, which has been setting new milestones ever since Fairfax’s entry as bank’s majority shareholder in 2018, is all set to invest about Rs500 crore to upgrade its technology platform.

The CEO&MD of the bank, Pralay Mondal, hinted that the amount earmarked for the technology infrastructure upgradation could be somewhat around the annual profit the bank earns now.

FY23 saw the bank achieve its highest-ever net profit of Rs547 crore even as the net NPA (bad loans) drops to 0.35 per cent, the capital adequacy ratio (CAR) tops 27 per cent and the provision coverage ratio (PCR) crosses 92 per cent, boasting one the industry’s best on all three fronts.

While briefing analysts on the bank’s Q4 performance, Mondal said the bank has decided to sharpen its focus on the technology platform in order to embrace the next level of growth that leads to the Sustain-Build-Scale 2030 (SBS 2030) Vision of the bank.

He said the major capital investments toward the technology up-gradation will take place in the next two years through the process is likely to be ongoing.

“FY 24 will be the most crucial year in the ‘build phase’ where we plan for major infra investments, technology being the key one,” Mondal added.

Stating that almost 70-80 per cent of what is there now in the bank in terms of the technology architecture won’t be there in the bank after two years, Mondal hinted that the present technology regime will witness a total overhaul.

“Whether it’s the core system, loan management system (LMS), loan origination system (LOS) corporate net banking, entire application programming interface (API) integration, lead management system, the entire project management system, all these will witness a total facelift,” he added.

New 100 branches

CSB Bank will continue with its branch expansion exercise, which will see the 703-strong network getting strengthened by another 100 branches during the current year (FY24).

Mondal said about 60 per cent of the new branches will be opened in the West and North of the country as part of the bank’s endeavour to achieve a pan-India image.

Gold-loan company?

Talking to myfinpoint.com, an analyst said CSB Bank seems to be functioning like a gold loan company in Kerala. The state accounts for only 27 per cent of the bank’s total advances compared with 55 per cent of the total deposits.

Interestingly, 60 per cent of the advances CSB Bank has disbursed in the state are just gold loans. The state accounts for 36 per cent of the total gold loans by the bank against 35 per cent in Tamil Nadu.