When T Latha, the MD and CEO of Dhanlaxmi Bank, took over the reins of the crisis-ridden bank in July 2018, she had some definite plans to turn around the 90-year-old institution.

Her efforts – with the collective support of the entire banking team – have not gone futile. The bank started making profits in the last two consecutive quarters with PAT of ₹16.90 crore in Q3 of the current fiscal vis-a-vis ₹21.74-crore loss in the corresponding period of the previous fiscal. Now, she is confident of achieving 8-10 per cent growth in business in the current fiscal, with a clear focus on retail growth, both in assets and liabilities. In a brief chat with BusinessLine , she spoke on the initiatives to enhance the bank’s business as well as strengthening the monitoring mechanism to arrest fresh slippages. Excerpts:

What led to the rise in net profits this quarter?

In the third quarter, operating profit increased by 38.96 per cent and net profit by 177.69 per cent. Net interest income and non-interest income have also increased by 8.92 per cent and 24.87 per cent, respectively. We could improve the net interest income through proper liability management. Our efforts to recover from written-off accounts also helped improve the total income. Further, reduction in provision requirement for NPA accounts due to effective recovery/monitoring measures and reduced provisioning requirement for investment portfolio, supported the increase in net profits.

Why has the gross NPA increased?

Gross NPA rose to 8.11 per cent of total advances from 6.96 per cent. It increased slightly due to stress in a few accounts in the last three quarters. However, net NPA is at the same level. To reduce gross NPA, we have strengthened the monitoring mechanism, which helped control fresh slippages. However, there is no particular sector responsible for the increase in gross NPA.

What measures did you take to reduce net NPA?

Net NPA declined to 2.93 per cent from 4.08 per cent a year ago due to recovery. Moreover, we have strengthened and streamlined the entire recovery and monitoring process and, reviewed regularly, at various levels, to improve the effectiveness. We have also introduced different recovery, OTS schemes to accelerate the process.

What are your plans for this quarter?

The bank intends to improve business by concentrating on retail growth, both in assets and liabilities. NPA reduction is another focus area, besides improving non-interest income

We have formed marketing teams to source credit business. Our main focus will be on gold loans, retail loans, business loans and MSMEs. We have a very strong business in the micro-finance sector and have come out with specific products to facilitate women customers.

We have introduced a new loan product, based on GST returns, to offer speedy solutions for the working capital requirements of MSME customers by way of overdraft. This facility brings in improved convenience of easy sanctioning of OD facility, as paper-intensive assessment of financial documents, including balance sheets of previous years, are not mandated. This also enhances the convenience for MSMEs (based on GST returns) for assessing their eligibility of working capital limits, thereby simplifying the process for sanctioning OD with minimum turnaround time.

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