Banking on relationships to top the industry
16 Feb 2014 9:21 PM GMT
UCO Bank is a great turnaround story. Please tell us a bit about this extraordinary journey.
I took over as UCO Bank CMD on 1 September, 2010. It soon became clear to me that this once Birla-owned bank would have to undergo some fundamental changes in its functioning to realise its true potential and enter the big league of Indian banking. First and foremost, there was a need to change the way the organisation’s people behaved across the board — from being reactive to proactive, hierarchical to collegial, inward looking to externally focused. Since the collective culture of an organisation is an aggregate of what is common to all of its group and individual mind-sets, such a transformation entailed changing the minds of hundreds or thousands of people. The turnaround strategy was formulated keeping the aforesaid factors in mind. The objective was to transform the organisation into a customer-centric, profit-oriented, technology-driven, modern bank.
In the era when India’s GDP was growing fast, ie during the first decade of the 21st century, UCO Bank pursued a strategy of ‘bulk lending supported by bulk deposits’ — a strategy that had many pitfalls. Business was being driven by HO and branches had gone out of the radar and reckoning. There was very little thrust on branching out in centres with potential, there was lack of urgency in customer acquisition, branch upkeep was practically non-existent and customer service was quite inadequate. With over-dependence on bulk business that led to concentration of risks, the business model was unsustainable.
One of the first decisions for effecting the turnaround was to overhaul the business model from bulk to retail banking both on the asset and liability sides. We decided to shed volatile and high-cost bulk deposits and build a low-cost stable fund base through manifold increase in our CASA deposit.
What are your major priorities now?
The main priorities are to achieve — • Growth in market share • Sustained increase in customer base • Substantial enhancement of retail and priority sector portfolios • Boost in recovery and reduction of NPAs • Expansion and increasing use of alternate delivery channels • Boost in non-interest income • Improvement in per employee business and profit • Well-equipped human resource.
How are you tackling your NPA problems?
We are proactively mapping the bank’s NPAs as managing asset health remains at the top of our agenda. The system-driven identification of bad loans as per regulatory mandate threw up a large number of legacy NPAs which had so far gone undetected and unreported because the bank was rather slow in technology adoption. But we have nonetheless declared bank’s NPAs even at the cost of net profits. During FY2012-13 alone ,we declared fresh NPAs of Rs 5,162 crore. By declaring them as NPAs, we could start recovery proceedings against them as otherwise bank’s money would have remained stuck without earning anything. We adopted a dual approach of preventive and curative management of assets. For accounts that have turned non-performing, the root causes were identified and genuine defaulters were provided hand-holding support to tide over the crisis while for others, we vigorously pursued various recovery channels like holding frequent recovery camps at all branches, organizing Lok Adalats, arriving at compromise settlements wherever appropriate, sale of assets of defaulters, taking recourse to SARFAESI Act, publishing the names of ‘wilful defaulters’ in the RBI Defaulters’ List to bring them to the negotiating table. All these steps resulted in substantial improvement in recovery from and upgradation of NPA accounts which reached a combined figure of almost Rs. 3,300 crore for the three years FY2010-11 to FY2012-13.
Does the economic slowdown have any impact on the bank’s performance?
Country’s economy and health of banking sector are closely interlinked. Evidently, India’s economy is passing through a very challenging and uncertain phase for reasons both internal and external. This uncertainty acts as a deterrent for investor sentiments and growth. There is a fall in demand due to depressed economic conditions affecting both the top line and the bottom line of corporate. Even companies that were doing well are not getting the kind of business they needed to stay healthy.
These conditions are putting stress on banks’ assets. Further, with high consumer inflation and loss of employment opportunities, NPAs are spreading to retail segments as well.
What are your plans on using more technology in banking solutions?
We plan to leverage technology to expand reach, lower costs, increase productivity and improve market share. With this in view we are implementing technology solutions in various areas of our activity For example, the cost efficiencies that online banking brings to the providers and the convenience it provides to the consumers are going to gradually propel this medium as one of the primary channels of banking. Bank has introduced state-of-the-art Internet banking including immediate payment service (IMPS) and mobile banking. From a position of 477 ATMs in March 2010, UCO Bank today has more than 2,000 ATM installations.
Besides, we are a member of National Financial Switch enabling the Banks Visa Debit cards being accepted at more than 1 lalch ATMs. To attract GenX customers, the Bank introduced three variants of Personalized International Visa Debit Card — Gold, Platinum and Signature. Debit cards are also being issued to current account holders of proprietorship firms and to those having CC facility against FDR. RTGS/NEFT facility is now available across all branches of the Bank.
We are also offering other value-added services like tax and utility bill payments, on-line share trading to address the needs of modem day customers. We are starting E-lobbies with ATMs, passbook printing machine, cash deposit machines, electronic cheque drop box at identified locations across the country to further customer convenience. Technology is being used for internal purposes as well like MIS, control and supervision, treasury operations, loan appraisals, credit monitoring and risk modeling/ assessing. Technology adoption has enabled the Bank to further the cause of financial inclusion. Bank has introduced ‘Bank on wheels’ for propelling financial inclusion. Harnessing technology holds the key for faster reach even more than the brick and mortar model. The best way offered for inclusive banking would be through mobile banking through a bank-led model and banking correspondent(BC) model.
With more new private players around, do you think it will create more competition?
India is an under-penetrated market and we thus believe that the new banks too have enough space and scope to grow without posing a major threat to the existing ones. Indeed, the new banks will make many more customers bankable, which even the existing banks can tap. In the long run, they will lead to financial penetration. With new players entering into the fray, there will be a surge in new technology-driven products, services & concepts. This is expected to lead to higher service quality will help the country reach the goal of 100 per cent financial inclusion.
What results are you projecting in the new financial year?
We are comfortable with a credit growth of 14-15 per cent, which is also in line with the RBI’s expectations. We are aware that in the current environment we cannot afford aggressive growth in credit. We are being very careful in choosing our borrowers. Our deposit growth is expected to be 15 to 16 per cent despite the reduction in our bulk deposits. Our core deposits have been growing at 40-45 per cent. The share of bulk deposits has come down below 10 per cent now. The good news is we are growing our deposits but not our cost of funds.
Bell Helicopters delivers first 407GX to India
Singapore: Bell Helicopter, a Textron Inc. company has announced the first delivery of a Bell 407GX in India to SpanAir, the country’s leading air charter company.
Specialising in customised travel options, SpanAir offers a fleet of aircraft fully equipped with the latest in aviation and safety technology, including all weather and IFR facilities.
With the addition of the 407GX, featuring the first integrated Garmin G1000H(TM) flight deck, SpanAir now has one of the most modern and advanced fleets operating in India.
‘The Bell 407GX is the most revolutionary single-engine aircraft in the country with ample information and technological assistance to avoid CFIT (controlled flight into terrain) accidents,’ said SpanAir Captain S K Mallik. Bell and SpanAir have enjoyed a long relationship starting with the delivery of their first aircraft, a Bell 407, in 1996, a year after SpanAir was established. Since then, the company has also added a Bell 429.
‘The Bell 407GX is gaining momentum all over the world as the most advanced light single engine helicopter on the market,’ said Bell Helicopter Sales Director (Asia Pacific region ) C M Hwang.
‘Customers are discovering that it is an ideal aircraft across mission and provides superior performance with trusted reliability. We are pleased that SpanAir continues to place their trust in Bell Helicopter. It is yet another endorsement of the value of the 407GX.’
The 407GX delivers power and speed with a smooth, quiet ride and a spacious cabin that accommodates six passengers. Built on the proven performance and reliability of the Bell 407 platform, the 407GX features the Garmin G1000H (TM) flight deck, providing critical flight information at a glance for greater situational awareness and increased safety.
The flight deck’s high resolution LCD screens host primary flight and multi-function display information, including Helicopter Terrain Avoidance Warning System, Helicopter Synthetic Vision Technology(TM), Traffic Information Systems and more.
The 407GX also features a tail rotor camera, allowing the pilot a clear view of the tail during take-offs and landings. Bell Helicopter, a wholly owned subsidiary of Textron Inc., is an industry-leading producer of commercial and military, manned and unmanned vertical-lift aircraft and the pioneer of the revolutionary tiltrotor aircraft.It is globally recognised for world-class customer service, innovation and superior quality, Bell’s global workforce serves customers in more than 120 countries.
It is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative solutions and services.
Textron is known around the world for its powerful brands such as Bell Helicopter, Cessna Aircraft Company, Jacobsen, Kautex, Lycoming, E-Z-GO, Greenlee, and Textron Systems.
I took over as UCO Bank CMD on 1 September, 2010. It soon became clear to me that this once Birla-owned bank would have to undergo some fundamental changes in its functioning to realise its true potential and enter the big league of Indian banking. First and foremost, there was a need to change the way the organisation’s people behaved across the board — from being reactive to proactive, hierarchical to collegial, inward looking to externally focused. Since the collective culture of an organisation is an aggregate of what is common to all of its group and individual mind-sets, such a transformation entailed changing the minds of hundreds or thousands of people. The turnaround strategy was formulated keeping the aforesaid factors in mind. The objective was to transform the organisation into a customer-centric, profit-oriented, technology-driven, modern bank.
In the era when India’s GDP was growing fast, ie during the first decade of the 21st century, UCO Bank pursued a strategy of ‘bulk lending supported by bulk deposits’ — a strategy that had many pitfalls. Business was being driven by HO and branches had gone out of the radar and reckoning. There was very little thrust on branching out in centres with potential, there was lack of urgency in customer acquisition, branch upkeep was practically non-existent and customer service was quite inadequate. With over-dependence on bulk business that led to concentration of risks, the business model was unsustainable.
One of the first decisions for effecting the turnaround was to overhaul the business model from bulk to retail banking both on the asset and liability sides. We decided to shed volatile and high-cost bulk deposits and build a low-cost stable fund base through manifold increase in our CASA deposit.
What are your major priorities now?
The main priorities are to achieve — • Growth in market share • Sustained increase in customer base • Substantial enhancement of retail and priority sector portfolios • Boost in recovery and reduction of NPAs • Expansion and increasing use of alternate delivery channels • Boost in non-interest income • Improvement in per employee business and profit • Well-equipped human resource.
How are you tackling your NPA problems?
We are proactively mapping the bank’s NPAs as managing asset health remains at the top of our agenda. The system-driven identification of bad loans as per regulatory mandate threw up a large number of legacy NPAs which had so far gone undetected and unreported because the bank was rather slow in technology adoption. But we have nonetheless declared bank’s NPAs even at the cost of net profits. During FY2012-13 alone ,we declared fresh NPAs of Rs 5,162 crore. By declaring them as NPAs, we could start recovery proceedings against them as otherwise bank’s money would have remained stuck without earning anything. We adopted a dual approach of preventive and curative management of assets. For accounts that have turned non-performing, the root causes were identified and genuine defaulters were provided hand-holding support to tide over the crisis while for others, we vigorously pursued various recovery channels like holding frequent recovery camps at all branches, organizing Lok Adalats, arriving at compromise settlements wherever appropriate, sale of assets of defaulters, taking recourse to SARFAESI Act, publishing the names of ‘wilful defaulters’ in the RBI Defaulters’ List to bring them to the negotiating table. All these steps resulted in substantial improvement in recovery from and upgradation of NPA accounts which reached a combined figure of almost Rs. 3,300 crore for the three years FY2010-11 to FY2012-13.
Does the economic slowdown have any impact on the bank’s performance?
Country’s economy and health of banking sector are closely interlinked. Evidently, India’s economy is passing through a very challenging and uncertain phase for reasons both internal and external. This uncertainty acts as a deterrent for investor sentiments and growth. There is a fall in demand due to depressed economic conditions affecting both the top line and the bottom line of corporate. Even companies that were doing well are not getting the kind of business they needed to stay healthy.
These conditions are putting stress on banks’ assets. Further, with high consumer inflation and loss of employment opportunities, NPAs are spreading to retail segments as well.
What are your plans on using more technology in banking solutions?
We plan to leverage technology to expand reach, lower costs, increase productivity and improve market share. With this in view we are implementing technology solutions in various areas of our activity For example, the cost efficiencies that online banking brings to the providers and the convenience it provides to the consumers are going to gradually propel this medium as one of the primary channels of banking. Bank has introduced state-of-the-art Internet banking including immediate payment service (IMPS) and mobile banking. From a position of 477 ATMs in March 2010, UCO Bank today has more than 2,000 ATM installations.
Besides, we are a member of National Financial Switch enabling the Banks Visa Debit cards being accepted at more than 1 lalch ATMs. To attract GenX customers, the Bank introduced three variants of Personalized International Visa Debit Card — Gold, Platinum and Signature. Debit cards are also being issued to current account holders of proprietorship firms and to those having CC facility against FDR. RTGS/NEFT facility is now available across all branches of the Bank.
We are also offering other value-added services like tax and utility bill payments, on-line share trading to address the needs of modem day customers. We are starting E-lobbies with ATMs, passbook printing machine, cash deposit machines, electronic cheque drop box at identified locations across the country to further customer convenience. Technology is being used for internal purposes as well like MIS, control and supervision, treasury operations, loan appraisals, credit monitoring and risk modeling/ assessing. Technology adoption has enabled the Bank to further the cause of financial inclusion. Bank has introduced ‘Bank on wheels’ for propelling financial inclusion. Harnessing technology holds the key for faster reach even more than the brick and mortar model. The best way offered for inclusive banking would be through mobile banking through a bank-led model and banking correspondent(BC) model.
With more new private players around, do you think it will create more competition?
India is an under-penetrated market and we thus believe that the new banks too have enough space and scope to grow without posing a major threat to the existing ones. Indeed, the new banks will make many more customers bankable, which even the existing banks can tap. In the long run, they will lead to financial penetration. With new players entering into the fray, there will be a surge in new technology-driven products, services & concepts. This is expected to lead to higher service quality will help the country reach the goal of 100 per cent financial inclusion.
What results are you projecting in the new financial year?
We are comfortable with a credit growth of 14-15 per cent, which is also in line with the RBI’s expectations. We are aware that in the current environment we cannot afford aggressive growth in credit. We are being very careful in choosing our borrowers. Our deposit growth is expected to be 15 to 16 per cent despite the reduction in our bulk deposits. Our core deposits have been growing at 40-45 per cent. The share of bulk deposits has come down below 10 per cent now. The good news is we are growing our deposits but not our cost of funds.
Bell Helicopters delivers first 407GX to India
Singapore: Bell Helicopter, a Textron Inc. company has announced the first delivery of a Bell 407GX in India to SpanAir, the country’s leading air charter company.
Specialising in customised travel options, SpanAir offers a fleet of aircraft fully equipped with the latest in aviation and safety technology, including all weather and IFR facilities.
With the addition of the 407GX, featuring the first integrated Garmin G1000H(TM) flight deck, SpanAir now has one of the most modern and advanced fleets operating in India.
‘The Bell 407GX is the most revolutionary single-engine aircraft in the country with ample information and technological assistance to avoid CFIT (controlled flight into terrain) accidents,’ said SpanAir Captain S K Mallik. Bell and SpanAir have enjoyed a long relationship starting with the delivery of their first aircraft, a Bell 407, in 1996, a year after SpanAir was established. Since then, the company has also added a Bell 429.
‘The Bell 407GX is gaining momentum all over the world as the most advanced light single engine helicopter on the market,’ said Bell Helicopter Sales Director (Asia Pacific region ) C M Hwang.
‘Customers are discovering that it is an ideal aircraft across mission and provides superior performance with trusted reliability. We are pleased that SpanAir continues to place their trust in Bell Helicopter. It is yet another endorsement of the value of the 407GX.’
The 407GX delivers power and speed with a smooth, quiet ride and a spacious cabin that accommodates six passengers. Built on the proven performance and reliability of the Bell 407 platform, the 407GX features the Garmin G1000H (TM) flight deck, providing critical flight information at a glance for greater situational awareness and increased safety.
The flight deck’s high resolution LCD screens host primary flight and multi-function display information, including Helicopter Terrain Avoidance Warning System, Helicopter Synthetic Vision Technology(TM), Traffic Information Systems and more.
The 407GX also features a tail rotor camera, allowing the pilot a clear view of the tail during take-offs and landings. Bell Helicopter, a wholly owned subsidiary of Textron Inc., is an industry-leading producer of commercial and military, manned and unmanned vertical-lift aircraft and the pioneer of the revolutionary tiltrotor aircraft.It is globally recognised for world-class customer service, innovation and superior quality, Bell’s global workforce serves customers in more than 120 countries.
It is a multi-industry company that leverages its global network of aircraft, defense, industrial and finance businesses to provide customers with innovative solutions and services.
Textron is known around the world for its powerful brands such as Bell Helicopter, Cessna Aircraft Company, Jacobsen, Kautex, Lycoming, E-Z-GO, Greenlee, and Textron Systems.
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