Federal Bank's new MD & CEO, KVS Manian, believes the aspiration to be among the nation's top five private banks is a natural progression for the nine-decade-old lender. In an exclusive interview with Rozebud Gonsalves and Sangita Mehta, Manian said that four segments - mass affluent, non-resident, SME and mid-market - are important for the bank that began as Travancore Federal Bank in 1931. Manian, who has taken over the top job after his predecessor ran the lender for more than a decade, also believes private capex revival that still seems relatively circumspect is key to boosting industry-wide credit demand. Edited excerpts:How has the journey at Federal Bank been so far?I am truly excited, there are no negatives to handle. The bank is very well poised. It has gained market share even in the last decade. What we need is that breakthrough. Just to go to the next level. Given my past experience, I saw it as a great opportunity to build something into the next league. And we can really break through into the top five league.To be among the top five private banks, you will have to shed the image of a largely Kerala-based bank?Of 1,550 branches we have 600 in Kerala, but 950 are outside Kerala. We plan to open about 400 to 450 branches largely outside Kerala over three years. So we began this journey to being a pan-India bank. It will not happen overnight. About 40% of our network is in Kerala, and 50-odd per cent of deposits come from Kerala.We are more known in adjacent states to Kerala, and even in Maharashtra after acquiring Ganesh Bank of Kuruvada. We also are strong in the North-East, for in good old times, the bank went to the North-East because some of the missionaries went there. I think we can carry that legacy forward by saying that we are the biggest bank in Kerala, and we are getting bigger in other places. I do feel that it is possible to build that image.You spoke about inorganic growth at a recent analyst meeting. Which are the product segments that you will target when you look at acquisitions?One way to look at it is that it adds heft to our core business. The second direction is the journey toward a universal bank, which is beyond core banking. There are other products, which are requirements of customers. So, some of the inorganic acquisitions can happen in that direction. We are also aiming to be a universal bank offering services like securities business and AMC. We will grow organically in businesses we understand like SME business and agribusiness. Affordable housing for example we haven't done.Also, one of the segments we are focused on is mass affluent and this segment requires products which are beyond just banking. Today, you don't get a customer only to do banking. You must be well aligned with multiple products that they will need. So, aspiring to be in the top 5 banks is a natural progression for us.You have also talked about increasing the share of low-cost deposits from 30% to 36% and the current account will need to do most of the heavy lifting.Our current account (CA) is 6% now. It is merely a matter of focus on the CA as an opportunity and many other banks are better than us. There are four segments I have said will be important for us - mass affluent, non-resident, SME and mid-market. I feel there is an upside possible.For CA, we are taking technology initiatives, launching our cash management and trade initiatives. We have created products which are competitive, focussed on tech. And lastly, there is focus on manpower in terms of capability. For instance, a business banking relationship manager (RM) has to be different from a personal banking RM.What is your view on interest rates and how will it impact your balance sheet?We are on a downward rate cycle. At least as things stand, it is going to be a shallow and not a deep rate cut cycle.And rate cuts on floating rate loans, spreads will relatively shrink. I think some pressure on the NIMs for the industry in general is obvious. I am hoping that the credit costs on the unsecured loans will normalise over the next one or two quarters. Maybe, there is pain for another quarter. While the rate cut cycle will be shallow, reduction in credit costs might happen. The credit costs will not go back to what we saw two- three years back. Absolutely a golden period kind of thing - that may not come back.Are you seeing signs of corporates looking at increasing capex?The private capex cycle is still a question mark. And therefore, overall credit growth on the corporate side will depend on when that returns. I think to get to the strong credit growth kind of a cycle, corporate private capex has to revive. Of course, retail will continue chugging along at the rate that it is growing. Even now, corporate growth is in single digits. So, the trigger that can change is private capex.