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The Union Government’s ‘Indradhanush’ plan will help improve the performance of public sector banks, said Andhra Bank Executive Director Ajit Kumar Rath.
“These measures will improve banks’ efficiency,” Rath told BusinessLine on Monday. Rath is probably the first ED to publicly comment on Indradhanush, which has been criticised by bank unions, such as All-India Bank Employees’ Association.
Finance Minister Arun Jaitley had on August 14 announced Indradhanush, a seven-pronged strategy to revamp public sector banks. These included appointment of private sector executives as CEOs and MDs of the banks, setting up of a Bank Board Bureau, and capital infusion into the banks.
Asked about the criticism that the appointment of corporate executives as MDs and CEOs would limit the bank ED’s career path, Rath, referring to Finance Secretary Hasmukh Adhia’s statement, pointed out that such executives would be appointed only in five banks. For others, the top positions would be filled from within the ‘talent pool’ available in public sector banks.
He also said the plan to have a Bank Board Bureau will help step up oversight at public banks and thus improve efficiency. The plan for infusing capital would strengthen the banking system, he argued.
Andhra Bank recently received ₹374 crore capital from the government; the bank had asked for a total of ₹3,000 crore, and for this year, ₹500 crore. Rath, who joined Andhra Bank in March this year after working as chief information officer at Union Bank of India, said the bank was planning a big push on the IT front. “We are planning to re-energise our payment system by stepping up the pre-paid wallet mechanism,” he said.
“We are also increasing the bank’s presence on social media.” The bank, which until recently mainly focussed on home State Andhra Pradesh, has been rapidly increasing its pan-India footprint. “We will expand our branch network to 3,000 by the end of this financial year,” he said.
Rath said the bank’s net non-performing assets as a percentage of total loans was now down to 2.99 per cent. One strategy being used to recover loans is to let employees stage peaceful demonstrations in front of the premises of big loan defaulters. This has paid off well, Rath said.
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