Dubey: New game plan
Mumbai, Feb. 23: Bangalore-based Canara Bank is revamping its organisational model to fight the problem of non-performing assets (NPAs).
During the third quarter of this fiscal, the nationalised bank witnessed a rise in its absolute gross NPAs because of a slippage of two large accounts amounting to Rs 900 crore.
Canara Bank has now involved its senior management in the process of tracking even small loans.
In an interview with The Telegraph, chairman and managing director R.K. Dubey said hitherto the head-office oversight was for accounts of Rs 1 crore and above. This has now been brought down to Rs 50 lakh and above and even to Rs 10 lakh and above. There is even a dedicated general manager who looks after the recovery of accounts under Rs 10 lakh.
“Canara Bank has initiated pro-active steps to prevent the incidence of overdues. We are generating daily reports of accounts, which are likely to be appearing in special watch or delinquent list of accounts in the next 30 days and the accounts are flagged off to different functionaries both at head office level and circle office level to address the issues immediately to prevent them from appearing in special watch list of accounts on completing 30 days,” he added.
Dubey said he was personally monitoring high-value accounts, which might turn into NPAs, along with executive directors.
The bank has put in place a dedicated restructuring assets division to provide end-to-end solutions in all restructuring cases depending upon the viability of the projects.
“We have also recently strengthened the credit administration and monitoring department to intensify the monitoring of borrowal accounts,” he said.
Dubey, who assumed charge in January 2013, has been credited with improving the performance of the bank on various fronts. The PSU lender’s growth in advances is far higher than the industry growth rate.
The bank has also been successful in meeting its priority sector obligations, which at one stage was at 31 per cent of its total advances, lower than the requirement of 40 per cent.
The Canara Bank chief said despite strong growth rate in advances, the bank did not expect bad loans to jump because of the efforts that were underway.
“When I took over, the bank’s business needed to improve on many key areas. This was reflected in a decline in business growth and the operating environment was characterised by inadequate thrust on performance and achievement culture. Accordingly, we devised focused growth strategies to enhance the topline and bottomline,” he said.
Dubey said the bank had also been successful in improving credit disbursals in sectors such as retail, agriculture and MSMEs, even as strategies to boost its low-cost CASA (current account and savings account) deposits had also paid off.
Canara Bank has launched an exercise called “Shikhar” that focuses on energising branches and customer service, growing a robust asset base and revamping the operating model.