Banking Frontiers - - Highlights - Me­hul@bank­ingfron­

Dec­can Mer­chants Co­op­er­a­tive Bank en­hances its tech­nol­ogy and achieves sig­nif­i­cant im­prove­ment in non-in­ter­est in­come:

The Dec­can Mer­chants Co­op­er­a­tive Bank is a lead­ing co­op­er­a­tive bank in Mumbai, with 13 branches lo­cated in the city, in Navi Mumbai, Thane and Pune. The bank has been in ex­is­tence for the last 99 years pro­vid­ing trusted and ex­cel­lent ser­vices to its cus­tomers. In the early 1900s, Mumbai’s pop­u­la­tion was around 14-15 lakh and three-fourths of this pop­u­la­tion was Marathi speak­ing. Th­ese peo­ple were mainly en­gaged by the ser­vice sec­tor, do­ing la­bor jobs or small busi­nesses and pro­fes­sions for their liveli­hood. The ed­u­cated Marathi busi­ness­men re­al­ized the need for hav­ing their own fi­nan­cial in­sti­tu­tion to as­sist them in their busi­ness ven­tures.

It was in 1914 that some cloth sell­ers, print­ing press own­ers, book pub­lish­ers, chemists and traders gath­ered to­gether to es­tab­lish an as­so­ci­a­tion of their own, called ‘The Dec­can Mer­chants As­so­ci­a­tion’. At a meet­ing of the mem­bers in Au­gust 1917, headed by renowned econ­o­mist Chin­ta­man­rao Sa­mant, it was de­cided to es­tab­lish a co­op­er­a­tive so­ci­ety thus came into ex­is­tence the Dec­can Mer­chants Co­op­er­a­tive So­ci­ety. There­after, in 1929, on the oc­ca­sion of Di­pavali Padva, the so­ci­ety was con­verted into the Dec­can Mer­chants Co­op­er­a­tive Bank. It be­gan op­er­a­tions with a sin­gle branch at Gir­gaum. In Au­gust 1937, an­other branch was opened at Dadar in Mumbai.

Tak­ing into con­sid­er­a­tion the progress of the bank over the years and its fi­nan­cial health, the Re­serve Bank of In­dia al­lowed it to merge an­other co­op­er­a­tive bank in the city – Gore­gaon-based Kalav­i­har Co­op­er­a­tive Bank – with it on 23 De­cem­ber 1978. This bank thus be­came Dec­can Mer­chants Co­op­er­a­tive Bank’s Gore­gaon branch. Kashinath Dinkar More has been chair­man of the bank since 2002.


Dec­can Mer­chants Co­op­er­a­tive Bank has 13 branches to­day. It has pres­ence all over Ma­ha­rash­tra. It op­er­ates 8 ATMs. It did not add any ATM or branch in 2016-17. Says chair­man K.D. More: “The num­ber of em­ploy­ees as on March 2017 got re­duced to 182 from 200 a year ago. We have re­cruited MBAs as as­sis­tant branch man­agers. The growth in busi­ness per em­ployee in 201617 is 19.89% against 9.46% in 2015-16. We do not in­tend to add any branch or ATM dur­ing 2017-18.”


The bank has a to­tal cus­tomer base of 360,221. It has re­duced the rate of in­ter­est on loans and ad­vances to be more com­pet­i­tive among banks, es­pe­cially com­mer­cial banks, and at­tract cus­tomers, es­pe­cially new bor­row­ers. It also of­fers at­trac­tive in­ter­est rates on de­posits.

More says the bank dif­fers from other co­op­er­a­tive banks in many ways. “As we are 100 years old, we have fam­ily re­la­tion­ships with all the cus­tomers and ac­count hold­ers. All the de­posits and ad­vances schemes are de­signed as per the re­quire­ments of the cus­tomers. In­ter­est rates on loans and ad­vances are rea­son­able. Our staff mem­bers are very help­ful and friendly. The fa­cil­i­ties pro­vided to cus­tomers are al­most at par with the com­mer­cial banks. Our branches are lo­cated at con­ve­nient and prime lo­ca­tions. We have im­ple­mented CBS with the aim of pro­vid­ing prompt and ef­fi­cient ser­vices to our cus­tomers,” he says.


The bank has been able to col­lect to­tal de­posits of `353 crore in 2016-2017. The to­tal amount of loans ex­tended was `91 crore, which is a yoy growth of 10%. The top 3 sec­tors which re­ceived loans from the bank dur­ing the year are whole­sale and re­tail traders, builders and con­trac­tors and jewel­ers.

Says More: “The prospect of in­crease in the loans sanc­tioned to whole­sale and re­tail traders in 2017-18 is above `30 crore and to jewel­ers `10 crore. We have stopped giv­ing loans to builders and con­trac­tors due to real es­tate ex­po­sure limit. The new sec­tors we are look­ing at in the next 12 months are ve­hi­cles, hous­ing and ed­u­ca­tion.”


The bank has put on its web­site, pro­ce­dures for ob­tain­ing loans. There are clear pro­ce­dures and check­lists. All the pro­cesses are sim­ple. Says More: “We have sim­pli­fied the process of loan sanc­tion­ing. The sanc­tion­ing pow­ers for loans up to `5 lakh are del­e­gated to branch man­agers and for loans up to `50 lakh to loan com­mit­tee. We have also cre­ated a credit rat­ing pol­icy, while all the scru­tiny and dis­burse­ment pro­ce­dures are quite sim­ple. The per­cent­age of loan pro­pos­als ap­proved by the bank dur­ing the last 3 years is 70-80%.”


Data Vi­sion Soft­ware So­lu­tions is the tech­nol­ogy ven­dor for the bank, while Ahi­jit Gaik­wad & Co func­tions as IT con­sul­tants. The bank has re­cently im­ple­mented ‘Se­cure IT’ soft­ware de­vel­oped by Velox So­lu­tion. More says the bank’s capex to opex ra­tio for IT bud­get is 80:20. The bank has 7 peo­ple in its IT de­part­ment.


The bank has both NCR and Diebold brand of ATMs. Some 200 trans­ac­tions are car­ried out per day at the ATMs. The bank gets its debit/ATM cards printed from Sar­va­tra Tech­nolo­gies. It has also im­ple­mented a 24-hour eSurveil­lance sys­tem from Her­ambh at the ATM premises.


The bank saw its to­tal NPAs go up marginally in 2016-17. Ac­cord­ing to More, re­cov­ery pro­ce­dures for 2017-18 have been strength­ened and cus­tomers are also will­ingly com­ing for­ward to re­pay the loans. “Due to re­ces­sion, some big bor­row­ers are fac­ing fi­nan­cial dif­fi­cul­ties. We are of­fer­ing set­tle­ment schemes. We have also cre­ated an ac­tion plan for re­cov­ery of dues and con­tain the growth of NPAs,” says More.


The bank has im­proved the look and feel of all its branches. To­day, they have LED screens, es­pe­cially for ad­ver­tise­ments of the bank’s schemes. It has re­cently pro­cured an ad­di­tional com­mu­ni­ca­tion line to func­tion as backup in or­der to en­sure that there is no down­time. Says More: “We have a strong phys­i­cal se­cu­rity sys­tem in branches. There are se­cu­rity guards as well as CCTV sur­veil­lance at all the branches. Fire de­tec­tion sys­tems are also func­tional in all the branches.”


The Dec­can Mer­chants Co­op­er­a­tive Bank has in­sur­ance tie-ups with Shri­ram Gen­eral In­sur­ance and Bharati Axa Life In­sur­ance. The in­come from third party prod­uct sales dur­ing the last 3 fi­nan­cial years has been ris­ing sig­nif­i­cantly. More says the bank’s in­come from such sales rose to `162.93 lakh in 2016-17 from `69.39 lakh in 201516 and `11.49 lakh in 2014-15. The to­tal non-in­ter­est in­come of the bank also has been ris­ing sig­nif­i­cantly - from `533.43 lakh in 2014-15 to `669.06 lakh in 201516 and `1131 lakh in 2016-17.


The bank is now pre­par­ing to cel­e­brate its cen­te­nary in this fi­nan­cial year. For this, the bank is pub­li­ciz­ing its var­i­ous pro­grams and prod­ucts. It has brought out ad­ver­tise­ments in var­i­ous me­dia. More says the bank will ar­range a num­ber of sem­i­nars, cus­tomer meets and bankers’ meets dur­ing the year. He says the year should re­main truly mem­o­rable for the bank as well as its cus­tomers.


The bank wants to open, as and when per­mit­ted in fu­ture, 7 more branches to make the to­tal num­ber of branches to 20. Says More: “We will aim to achieve growth of 12% in de­posits and 10% in credit for 2017-18.”

KD More wants to sus­tain the sig­nif­i­cant rise in the non­in­ter­est in­come of the bank in the cur­rent fi­nan­cial year as well

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