Expecting NIMs to climb in a few quarters'

R SUBRAMANIAKUMAR, managing director and chief executive officer of RBL Bank, outlines the bank's approach to safeguarding its net interest margin (NIM), mobilising liabilities amid fierce competition for deposits, and reorganising its advances portfolio in an interaction with Subrata Panda in Mumbai. Edited excerpts:

The bank reported a NIM of 5.67 per cent in the first quarter. How do you plan to maintain your NIMS going forward? We have a good percentage of fixed-rate loans. Additionally, we have maintained our deposit rates for some time and, as a philosophy, the bank has shifted towards the granularisation of deposits and advances.

The availability of products through our 1,800 distribution centres provides us with a foothold in the deeper pockets of the country and gives us an edge over our peers in deposit granularisation, which then funds our granular advances.

Moreover, there has been a change in the advances mix, with the share of corporate loans decreasing. Essentially, we have replaced low-yielding loans with higher-yielding ones in the retail secured space and commercial banking loans. All these factors have contributed to our current NIMs. Going forward, we believe that we will remain in the 5.45 per cent range for a couple of quarters, after which we expect to see an increase.

How will NIM improve?