Around 2001, for the first time, corporate India started becoming competitive. By 2003, it was apparent this competitiveness was here to stay. Corporate India is happening. If it grows, banks grow. In order to build domestic scale, the next big opportunity is rural, which we are now articulating.

Public sector banks have not been able to service rural lending adequately. Yet, you are talking about it as a growth area…

We are doing everything differently, like we did with consumer credit. We need to see where that market is greater and how we can build it up. A key difference in our strategy is rural branches. Other branches are seen as deposit-mobilising outlets. In rural areas, we are basically looking to lend.

It’s a myth you need branches to lend, as has been borne out by the consumer credit experience. We have to work with partners, otherwise costs become prohibitive. There’s an array of partners. In fact, you have more partners in rural India than in urban India.

How’s that?

For example, micro-credit institutions. They are organised, and they have well-defined operating systems and policies. They will work on technology platforms we are comfortable with. So, all the normal banking depth that we seek is available. We are working on selecting the technology and making it available to micro-credit institutions.

Your biggest competitor in that market is the local moneylender. He might be charging more interest than you, but he has precise information about the credit-worthiness of people.

... contd.