Expect retail loans to drive incremental advances

City Union Bank, traditionally focused on MSMEs, has expanded into retail lending. In an interview with Narayanan V, managing director and CEO N Kamakodi explains the rationale behind diversifying its portfolio, and outlines its lending plans. Excerpts

- N Kamakodi

City Union Bank, traditionally focused on MSMEs, has expanded into retail lending. In an interview with Narayanan V, managing director and CEO N Kamakodi explains the rationale behind diversifying its portfolio, and outlines its lending plans. Excerpts:

Was the absence of a repo rate cut in the recent monetary policy review disappointing?

We cannot say that a reduction in the repo rate was expected. The signals from earlier policy meetings were very clear that the focus would be on inflation. While many expressed their wish for a rate cut, especially given that economic growth was below anticipated levels, indications clearly suggest a need to restore a balance between growth and inflation. The RBI has taken a right balance. That said, the 50-basis-point cut in the cash reserve ratio to 4% is a strong indicator that the rate-cut cycle will begin sooner rather than later.

Credit growth outpaced your deposit growth in the last two quarters. Is deposit mobilisation still a challenge?