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.
NO NETWORK EXPANSION
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.”
CUSTOMERS, LIKE FAMILY
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.
GROWING DEPOSITS & LOANS
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.”
3RD PARTY PRODUCTS
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