It’s going to be north versus south in the banking sector as south India-based banks are expanding fast in the northern region. The north focussed expansion plans of Laxmi Vilas Bank, Karur Vysya Bank, Dhanlaxmi Bank, Vijaya Bank and Federal Bank is primarily driven by aspiration to acquire national character.
Kerala-based Dhanlaxmi Bank plans to open around 325 branches by the end of 2012-13, of which more than 75 per cent branches will be in the northern part of India.
Tamil Nadu-based Karur Vysya Bank is planning around 120 branches in the next three years of which two-thirds are in north India.
Kerala’s Federal Bank will open around 100 branches, of which more than half will be for North. Likewise, Vijaya Bank plans to open around 90 branches in current fiscal, of which 75 per cent will be in north.
In order to be a national bank, they are doing everything, even if it means changing the name. For instance, the 82-years-old Dhanlaxmi Bank recently removed some letters from Dhanalakshmi — the name giving it southern touch — and simplified it to Dhanlaxmi in order to connect to wider audience.
“Branches are just the touch points for customers and opening branches is a part of bigger strategy,” said Bipin Kabra, CEO, Dhanlaxmi Bank.
“We will hire employees from north to connect the bank with local customers,” says P.R. Somasundaram, MD and CEO, Lakshmi Vilas Bank. “If multinational banks can work in India by hiring Indian talent, then why south Indian banks operate in north India,” he adds.
“There is enough space for every players as there are still millions of people in the country not having bank account,” added PR Kalyanaraman, executive director, Federal Bank.