Mrutyunjay Mahapatra, MD and CEO, Syndicate Bank, is bullish on achieving the ₹5-lakh crore business target this fiscal on the back of strategies adopted by the bank in a competitive environment. In an interaction with BusinessLine , he said: “We are looking at 12 per cent growth in deposits and 10 per cent in advances as the bank has started showing signs of growth in sectors such as retail, agri and MSME.”
Mahapatra, who was in Kochi for the inauguration of the Ernakulam-based zonal office, said there has been good response to the recently introduced ‘housing loan takeover dhamaka’. NBFCs have been given a special credit line on lending term loans. Excerpts:
Can you brief us on the progress of NPA recovery at Syndicate Bank?
All kinds of recovery that are in the pipeline have gained traction. During the last quarter, our gross NPA ratio has come down from 11.78 per cent to 11.46 per cent and net NPA has remained the same at 5.96 per cent. The provisions are still below the RBI’s threshold for PSBs. We are aggressively pursuing measures such as DRT, contractual cases, SARFAESI, and one-time settlement offers, among others. All these measures have started yielding results as the per day recovery rate has improved dramatically to ₹26 crore from ₹18 crore in the first quarter.
We are expecting ₹30 crore per day recovery rate, which is the sweet spot. Our aim is to keep the net slippage at zero. We are in the banking business and some loans may go bad.
We would be able to contain slippages in four out of nine zonal offices to the March 2019 level. In others, there is a small increase, but we believe it will come below the level soon.
We have a specialised vertical for stressed asset management. But we have given specific instructions to employees to be more empathetic to small and medium enterprises when it comes to recovery as part of the social commitment of PSBs.
What about the merger with Canara Bank? Has it affected the morale of the staff?
The process has already started and the time-frame set for the amalgamation proposal was April 1, 2020. The proposal is still with the Cabinet and, till then, it is business as usual for the bank.
We have assured employees that there would be no closure of branches or realignment of workers. Their benefits will remain the same. Later on it will be business as usual after two or three years.
There could be some emotional issues, but the employees’ morale is high. There were a lot of reward recognition programmes, such as special leadership training, personal effectiveness, and organisational effectiveness. We are also doing an HR transformational exercise with KPMG as consultants.
What steps have been taken to reduce interest rates?
Right now retail loans are linked to repo rates. Whenever the RBI reduces rates, repo-related loans get reset automatically at the end of the month.
Do you foresee any signs of economic recovery and growth in the country?
The credit pick-up is yet to start. Thanks to good monsoon, the agriculture sector is back on track. The service sectors, especially IT and BPO, are also doing well. There are also positive developments in the MSME sector, especially in the ancillary sector and export-oriented MSME.
However, capacity expansion is not happening in the manufacturing sector as people are on a wait-and-watch mode. Sectors such as cement, power, iron and steel are yet to pick up.
Can you clarify on the issue raised by BMS’ union over a fraudulent activity involving a builder and some executives of the bank that has resulted in an NPA?
This is an old NPA case that is going through all the usual methods of recovery. It is one of the NPAs and there are thousands of NPA accounts.
There is no substance in getting it further investigated. It is purely ‘mud slinging’ between two groups of senior executives who are making unsubstantiated statements to put others in controversy.