For Mr Albert Tauro, Chairman and Managing Director, Vijaya Bank, who is due to retire on March 31, it has been a fruitful and continuous journey. Though unfinished agendas still remain, with adequate capital (achieved through plough-back of profits and government benevolence), a much improved balance-sheet and robust technology, “I think the bank is headed towards better days,” he told Business Line .

Excerpts from the interview:

What has been your experience as a banker and CMD of a public sector bank?

A banker is in a position to touch the lives of people in various ways, and you always have a challenging as well as satisfying role because you are in a position to help make dreams come true.

Public sector banks have a different set of challenges. The Government and the RBI are very supportive, proactive and understanding, and so it's not very difficult to work in a public sector bank. And with a large number of committed employees, I should say it has been a fruitful journey.

What were your best and most challenging moments?

There are a series of challenges in a dynamic field like banking, but these are all professional challenges. They are not insurmountable and peculiar to me. I don't remember any challenge that was overwhelming.

The best moments are difficult to recall too. One thing that I can probably tell you is that looking back at my career when I started as a clerk in the RBI in 1970, and that too coming from a remote village to a metro like Mumbai, I never dreamt, forget about yearning, that I may retire one day as a chairman of a bank. That way, it has been a continuous journey, a steady growth.

What were the challenges when you took over as CMD of Vijaya Bank? How did you overcome them?

When I joined this bank, one of the main challenges was the capital adequacy ratio, which was at 10.3 per cent — 5.2 per cent of tier-I and 5.1 per cent of tier-II. That means you are in a situation wherein no tier-II capital could have been raised. Tier-I is a different ball game — government capital or innovative perpetual debt (IPD). Looking at the overall tier-I composition, there was no headroom for IPD also. That was a major challenge.

Then, we had very low NIM at 1.68 per cent, probably the lowest in the industry. From that, we have reached a nine-month average of 3.16 per cent in December 2010.

Another challenge was the negative NII for two-three quarters consecutively year-on-year, which means we were losing for every rupee of incremental business that we made. However, in the last 11-12 quarters, the minimum increase in NII has been 30 per cent.

Then, we had a loss-making quarter in June 2008, largely mark-to-market (MTM) losses. We have now made all kinds of safeguards in the treasury.

Lot of efforts and awareness within the organisation have helped us overcome these problems. The organisation was not really focussed on these areas or even well-versed in concepts such as CASA, NIM, NII and treasury management, earlier. The orientation and focus were lacking. Huge improvement in those fields and so many other intangible improvements will ensure that better days are ahead for the bank.

Another challenge was that we had a low CASA at 23-25 per cent. But CASA remains unchanged, despite best efforts.

What is your biggest achievement as CMD?

Apart from the above, on the softer side, a huge improvement in systems and processes, paradigm shift in the form of approach to business and approach to key focus areas which was largely lacking earlier. These have changed in a very significant way, and will stand this bank in good stead.

Any unfinished agenda?

One is CASA, despite best efforts it has not grown as much as it should have grown. It is my main concern.

Lot of efforts were made to reduce our dependence on bulk deposits. It is still not behind us. Our desired level would have been 25 per cent and below, including CDs and bulk deposits. But it has not come down, and has remained around 35 per cent.

I don't consider NPAs as unfinished agenda. By finishing the agenda, numbers have not improved but worsened. But the worst is over. When I joined the bank, gross NPA was at 1.3 per cent, and it has almost doubled now. One reason is that the industry itself has seen an increase in NPAs and the other is our consistent migration to system-based NPA tracking. From June onwards, they have been coming down steadily. This March it would not go down, but it will be a one-time issue.

Growth hasn't been very aggressive; however, going forward, with the NPA concern almost over, sub-BPLR lending gone out of the books, and base rate giving an almost level-playing field, growth in advances will be good. It has been sustained from October 2010, and it has been going up from that time. So, that trend will continue in the coming year.

What will be your advice to your successor?

I would not like to give any advice, but would like to tell that there is no hidden devil in our numbers. It is a good bank, and we have a good commitment and involvement from the staff. With various initiatives taken, especially from the balance sheet perspective — NPAs having been almost green and lot of provisions having been made, including on the employees side, and treasury having been managed reasonably well — the bank is headed towards better days.

Capital is not a concern, and technology is 100 per cent and robust. Even in areas such as treasury integration, risk management, and HR management systems, packages are almost completely implemented, and they are working well. CBS is working quite efficiently. I think better days are ahead for the bank.

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