Andhra Bank is working to facilitate NRI investments into the National Pension System

The International Monetary Fund (IMF) predicts that India will be the fastest growing economy among emerging markets with a growth rate of 7.5 per cent for FY 2015-16.

Andhra Bank, a leading public sector lender, has more than 2,500 branches in India and two representative offices - one each in Dubai and New Jersey.
Excerpts from an interview with S K Kalra, Executive Director and Managing Director, and CEO (additional charge), Andhra Bank:
Give us your perspective on the banking scenario in India for the rest of the year.
The Indian economy is poised to perform well during the current financial year. The International Monetary Fund (IMF) predicts that India will be the fastest growing economy among emerging markets with a growth rate of 7.5 per cent for FY 2015-16. These developments have a positive impact on banking performance in the next three quarters.
There is a revival in the investment cycle spearheaded by capital expenditure by government in core infra sectors like power, roads, railways, etc. Besides, the government is taking specific measures to kick-start stalled projects. These moves will encourage further private investment and have positive spillover on other connected sectors.
Taking these factors into account, along with money supply growth at 13 per cent, non-food credit for the current financial year is expected to be about 14 per cent. However, we expect to see credit demand picking up during H2 FY 2015-16. The uptick in economic activity will also improve asset quality and contribute for better profitability for the banks.
Do you expect interest rates to decline further?
Though global events affect Indian markets, they are resilient due to the efforts by the central bank and the government to keep inflation under control. The central bank will take an appropriate call based on evolving data.
Has there been a surge in remittances from NRIs especially from the Gulf? How has your remittance business fared?
As per data from the Reserve Bank of India (RBI), there is a little over $115 billion in NRI accounts in India. The country is the largest recipient of remittance flows in the world, receiving nearly $70 billion in 2014.
Around 25 million foreigners come to the Gulf - a majority being Indians - and send over $100 billion estimated to be 6.2 per cent of the combined GDP of the six GCC countries. The remittance is roughly twice the figure for 2010, which is an indication of strong growth in the region.
More than half of remittances to India are from the Gulf region. The major reason is because GCC countries do not charge any income tax and have restrictions on foreign ownership and investments.
Presently, we are having rupee drawing arrangements for speed remittance with two exchange houses - the UAE Exchange House in Abu Dhabi and Oman, and UAE Exchange House, Oman - to cater to the needs of the vast Indian population in the Middle East.
With the aim of expanding our services all over the Middle East, we established our first representative office in Dubai in 2006.
In 2014, we received nearly 50,000 remittances amounting to Rs2.3 billion through the exchange houses. We aim to tie-up with more exchange houses in the future for increasing the number of remittances.
The pension fund regulator wants NRIs to invest in the National Pension System (NPS) and is encouraging banks to tap the market. Is your bank planning to draw NRI funds into the pension system?
The pension fund regulator is encouraging banks to enable NRIs to invest in NPS. Though the facility was made available to NRIs from the inception of the NPS, the recent RBI clarification on the issue is set to increase investment by NRIs. We are working on facilitating NRIs to invest in NPS and will soon come out with detailed operational guidelines. This scheme will be more beneficial to NRIs who plan to return to India. This is a very lucrative investment option generally not available on a broader basis.
What are your bank's expansion plans, especially with regard to catering to NRIs' needs?
The bank is on an expansion mode to garner business in new areas and to have a pan-India presence. In last three years the bank has added 800-plus branches. The bank had 2,522 branches spread across the country as on June 30. The focus of this expansion was to get new customers into our fold with special emphasis on catering to the needs of NRI customers all over India.
We have representative offices in New Jersey and Dubai, besides a joint venture banking company in Malaysia - the India International Bank (Malaysia) Berhad. The bank has always taken steps to connect the Indian diaspora to their loved ones back home through its vast network of branches. The bank is also leveraging technology to provide better services to NRIs.
Last year, Andhra Bank enabled inward foreign remittance through Immediate Payment Services (IMPS) to enable quicker remittance of funds.

• India