Central Bank of India has been relatively slow (as compared with other banks) in imbibing new technology. But it has now caught up, says the bank's Executive Director, Ms V.R. Iyer.

The bank completed networking of all its branches, numbering close to 4,000 about a year ago. It is now aggressively expanding its ATM network. “We have around 1,494 ATMs at present. We want to increase it to 2,000 in the next six months, and add another 1,000 before the end of 2013,” she told Business Line . Excerpts from an interview.

On gearing up on technology front

Since we came in late, we are contemplating a kind of kiosk, wherever we have sufficient space available. We will have a machine to check cash collection, pass book printer, a suite of IT machines that can take care of customer requirements. We are also trying to put micro ATMs, biometric ATMs for people who are not literate. The challenge here is in teaching such people how to use the machine. Ultimately, we would like to move all such mundane matters to the machine, so we can concentrate on marketing and connecting with customers, for banking is becoming more market-oriented and highly competitive.

I certainly won't deny that it has had some impact. But the delay was just 2-3 years. We are now in the process of contacting those customers who have left us. The account could still be with us, but probably lying dormant. The response has been positive. We seem to have lost out to the highly tech-savvy younger generation. We are now campaigning aggressively, going to all the institutions, IT companies and wherever there is potential to grow. We have leapfrogged. The challenge though is not in just having the products, but in being able to sell to our customers.

Credit offtake

It has moderated since. Scheduled commercial banks (SCBs) have grown at 18 per cent compared to the 22 per cent the year before. All banks have been affected and we are no exception. We have registered a 16 per cent year-on-year growth, and the sentiments look positive, going forward. We should be doing better April onwards.

On rising NPAs

It is on the rise as the economy itself has not been doing well and also because it is ‘system-driven'. The RBI's regulatory guidelines have come only now. While there will be some flexibility when done manually, in a system-driven environment, a lot will depend upon the correctness of the data.

Take education loan for instance. If the borrower is pursuing an engineering degree, it will be a four- year programme and one additional year is given till he gets employment. If the data is not fed correctly, the system will start deducting from the immediate quarter, after the fourth year.

In the same way, the moratorium period, re-payment period, stock value etc have to be fed accurately, lest it reflects otherwise. We have realised that more than 60 per cent of the data entry part have not been fed correctly and have initiated measures to rectify these. It is a tough task, but we are at it and this will be an ongoing exercise. We are on an aggressive recovery drive, have revisited OTS (One-Time Settlement) and all other schemes.

I do find more stress in some sectors, but that is due to various issues at the macro level like telecom and textiles. We have reduced our exposure in the telecom sector in the last one year. It is around Rs 1,600 crore at present and everything is performing. There is no noticeable stress on the educational loan front.

On raising capital

We were informed of the Government's approval of a sum of Rs 700 crore and expect this to come by way of preference shares. We did not seek any capital immediately because we raised Rs 2,400 crore by way of rights less than a year ago and felt we were adequately capitalised. But the government seems to be working proactively to make banks submit their business plans for a three-year period, including capital requirement. We had submitted our business and vision plan and this could have been released from their budgetary provision. We expect to get it by March.

On CentHome Fin

This subsidiary has not been very active. We are in the process of activating it. We have developed a vision plan and formed a strategy to take this plan forward. In a span of two years, we want to see this subsidiary grow so we can unlock its value. CentHome Fin has only 11 branches at present. We have posted a General Manager exclusively to oversee the operations and plan to bring it under CBS (Core Banking) platform.

On future growth plans

We are aiming to move one notch up in position, want to grow faster than the industry — at least by 3 percentage points faster. We are trying to garner more government funds. On the technology front, we offer customised solutions to big corporates.

Related Topics
comment COMMENT NOW