GP Par­sik Bank tar­gets `10,000 cr busi­ness, 100 branches

Gopinath Patil Par­sik Janata Sa­hakari Bank, present in Ma­ha­rash­tra, Goa and Kar­nataka, is com­pa­ra­ble to any pri­vate bank in its func­tion­ing

Banking Frontiers - - Contents - Mo­han@bank­ingfron­tiers.com

Gopinath Patil Par­sik Janata Sa­hakari Bank, present in Ma­ha­rash­tra, Goa and Kar­nataka, is com­pa­ra­ble to any pri­vate bank in its func­tion­ing

Gopinath Patil Par­sik Janata Sa­hakari Bank, is a co­op­er­a­tive bank with a dis­tinct but dif­fer­ent iden­tity among co­op­er­a­tive banks in the coun­try. Head­quar­tered in the sub­urb of Kalwa in Thane dis­trict of Ma­ha­rash­tra, this 80-branch multi-state co­op­er­a­tive bank is known among co­op­er­a­tive bank cus­tomers for its trans­parency in the first in­stance and for its new gen­er­a­tion bank­ing ser­vices too.

“What dis­tin­guishes GP Par­sik Bank from other co­op­er­a­tive banks is the trans­parency in all our deal­ings,” says Sadanand Nayak, CEO of the bank. “As you know, co­op­er­a­tive bank­ing sec­tor has been lag­ging in this as­pect be­cause of var­i­ous rea­sons, in­clud­ing fa­voritism, lack of pro­fes­sional ap­proach in busi­ness deal­ings and to a great ex­tent ab­sence of sys­tems and pro­cesses. We at GP Par­sik Bank have been able to over­come these pro­fes­sional haz­ards and the bank’s en­tire op­er­a­tions are an open book. We have been able to gain a rep­u­ta­tion for this as­pect and our cus­tomers would vouch for this,” he adds.

CON­SIS­TENT GROWTH

Nayak says growth in the co­op­er­a­tive bank­ing sec­tor has in gen­eral been im­pacted over the last 3 years. But GP Par­sik Bank has been con­sis­tent in its growth for the last sev­eral years - es­pe­cially from 2013 on­wards. “So, in 2013, we had 39 branches, and today we have 80. We have be­come a multi-state sched­uled bank, with branches in Goa and Kar­nataka. We will open 11 more branches for which we have li­cense from the RBI. Sim­i­larly, we have been mak­ing prof­its all through, and prof­its have grown in the last 4 years - from`22 crore in 2013 to `47 crore in 2016-17. In 201617, we achieved a busi­ness mix of `4756.69 crore, which is a growth of 19.13% over the pre­vi­ous year. The growth in ad­vances has been 14.82%, against the growth of 5.08% reg­is­tered by the bank­ing sec­tor in In­dia. Our de­posits too grew dur­ing the year, touch­ing `2979.78 crore, against `2445.45 crore in the pre­vi­ous year. These are the fac­tors that dis­tin­guish us from the run of the mill banks in the sec­tor,” says he.

2 SETS OF CUS­TOMERS

Nayak says the bank ser­vices its cus­tomers in two very dis­tinct ways. “We have con­tin­ued to re­tain the tra­di­tional bank­ing fa­cil­i­ties to cater to our old gen­er­a­tion cus­tomers. Some of these cus­tomers have been with us ever since we started op­er­a­tions in 1972. For them, we have branches - we do not in­tend to cur­tail the num­ber of branches where they would be at­tended to in a very per­sonal man­ner, their needs met by our of­fi­cers and staff ef­fi­ciently and in a timely man­ner. When they come to the branches, they are also in­tro­duced to modern bank­ing meth­ods, in­clud­ing new chan­nels like ATM or in­ter­net bank­ing and mo­ti­vated to adopt these fa­cil­i­ties. In fact, in most of our branches, we have posted staff mem­bers, who han­dle this as­pect, which in­cludes ed­u­cat­ing the old gen­er­a­tion cus­tomers in the use of lat­est chan­nels,” he ex­plains.

And for the new gen­er­a­tion cus­tomers, which the bank has in abun­dant num­bers, it has in­tro­duced the new gen­er­a­tion bank­ing in all de­tails. “We have in­ter­net bank­ing - we are one of the few co­op­er­a­tive banks in the coun­try al­lowed by the RBI to have full-fledged in­ter­net bank­ing, in­clud­ing trans­ac­tions - mobile bank­ing, ATMs, RTGS/NEFT, UPI, BHIM, Bharat Bill Pay­ment Sys­tem (BBPS), etc. These cus­tomers can carry out their bank­ing ac­tiv­i­ties from the con­fines of their of­fices or homes and the fa­cil­i­ties we of­fer are on par with those of­fered by the lead­ing pri­vate sec­tor banks,” says Nayak.

MSME, RE­TAIL FO­CUS AR­EAS

MSME and re­tail fi­nanc­ing has been GP Par­sik Bank’s forte. While its cor­po­rate bank­ing port­fo­lio is very nom­i­nal, the MSME port­fo­lio ac­counts for nearly 55% of ad­vances. Among the sec­tors that the bank has ex­po­sure in the MSME sec­tor, tex­tiles ac­count for a sub­stan­tial por­tion. There are many tex­tile units in Bhi­wandi and Ichalka­ranji in Ma­ha­rash­tra and the bank has a strong pres­ence in these two towns. In re­tail, the bank of­fers home loans, ve­hi­cle loans and per­sonal loans.

“Since most of the MSME cus­tomers be­long to the un­or­ga­nized sec­tor, they faced fund crunch dur­ing the pe­riod fol­low­ing the de­mon­e­ti­za­tion,” says Nayak. “To some ex­tent, this had an im­pact on our recoveries, but since our sys­tem is ef­fi­cient, there have been no delin­quen­cies.”

Nayak points out some­thing unique about the bank. “Ever since es­tab­lish­ment, we have never opted for OTS, that is one­time set­tle­ment. Our le­gal ac­tion against a cus­tomer in the debt re­cov­ery tri­bunals are also min­i­mal. We have been able to do this be­cause of our bet­ter and ef­fec­tive risk man­age­ment pro­cesses. What we be­lieve in

is ef­fec­tive loan ap­praisals, good mon­i­tor­ing and per­sua­sion to re­pay the loans rather than lit­i­ga­tion,” he says.

The bank’s re­tail loans port­fo­lio too has been trou­ble-free with lit­tle or no delin­quen­cies. How­ever, there have been de­faults in re­pay­ments of ve­hi­cle loans. This is mainly by taxi op­er­a­tors - Ola and Uber - who have availed loans for the pur­chase of their ve­hi­cles. The bank took ef­fec­tive and timely mea­sures to con­tain these delin­quen­cies. Ve­hi­cle loans to Ola and Uber op­er­a­tors have been found to be a prob­lem area and the bank has vir­tu­ally stopped of­fer­ing loans to this seg­ment of cus­tomers.

NEG­LI­GI­BLE NPA

“Our gross NPA in 2016-17 has been 2.66% (`47.35 crore), which is marginally higher than the 2015-16 fig­ure of 2.49% (`38.59 crore), but is among the low­est in the bank­ing sec­tor. Net NPA has all along been 0%,” points out Nayak.

He also adds that the bank has been mak­ing en­hanced pro­vi­sions, quite un­like many co­op­er­a­tive banks or for that mat­ter pub­lic sec­tor and pri­vate banks. Against a statu­tory pro­vi­sion re­quire­ment of `13.20 crore in 2016-17, the bank has made pro­vi­sion to the tune of `91.26 crore, which is equiv­a­lent of 192.73% cov­er­age ra­tio. This is one of the high­est in the in­dus­try.

TECH­NOL­OGY UP­GRADE

Nayak says the tech­nol­ogy in­fra­struc­ture of the bank is so ro­bust and ef­fi­cient that it is one among the 3 co­op­er­a­tive banks in the coun­try al­lowed to op­er­ate BBPS. In fact, sev­eral other co­op­er­a­tive banks have ap­proached the bank for sub-mem­ber­ship of BBPS and the bank is con­sid­er­ing of­fer­ing this fa­cil­ity. This will be a non­in­ter­est in­come and help it to meet the cost of op­er­at­ing BBPS.

“When I talk about tech­nol­ogy in­fra­struc­ture, we are now fac­ing con­straints in our CBS sys­tem be­cause we have grown, our cus­tomer base has grown ex­po­nen­tially and we are of­fer­ing prod­ucts and ser­vices that the ex­ist­ing sys­tem is not ca­pa­ble of han­dling,” says Nayak. “We are now in the process of mi­grat­ing to a new CBS - Fi­na­cle ver­sion 10 from In­fosys.”

In do­ing so, the bank has taken up two im­por­tant tasks. One is up­dat­ing the data to be in con­so­nance with the data struc­ture re­quire­ments of the new CBS. The bank has a lot of legacy data, which is not struc­tured and it in­tends to make all the data struc­tured. So, while this job is be­ing un­der­taken, the bank would also want to ac­com­plish 4 dis­tinct tar­gets. It is get­ting all the per­sonal data of the cus­tomers up-to-date and for this pur­pose, it is even send­ing out staff mem­bers to the res­i­dences of cus­tomers so that the data it col­lects is au­then­tic and er­ror-free. While do­ing this, it is also seek­ing cus­tomer feed­back on prod­ucts and ser­vices and pos­si­ble short­com­ings in the of­fer­ings. While the staff mem­bers meet and in­ter­act with the cus­tomers, they are also seek­ing ref­er­ences from them for po­ten­tial cus­tomers. Fi­nally, it is si­mul­ta­ne­ously tak­ing up the work of PAN-Aad­haar link­age.

“The sec­ond task,” says Nayak, “is up­grad­ing our hard­ware. We have de­cided to go for a com­plete re­vamp of the sys­tems in our data cen­ter in our head of­fice and our DR site at Pune. We have opted for HPE’s sys­tems. The new hard­ware is also in­tended to meet the re­quire­ments of the pro­posed CBS mi­gra­tion. There is sub­stan­tial in­vest­ment in these up­grades and we hope this will bring in more ef­fi­ciency, bet­ter in­ter­ac­tion with cus­tomers and bet­ter ser­vic­ing and fi­nally bet­ter busi­ness for us.”

The bank has en­gaged con­sul­tants to guide its staff in the im­ple­men­ta­tion, while the im­ple­men­ta­tion per se will be han­dled by the bank’s own IT staff.

Nayak says the bank has im­ple­mented a rugged se­cu­rity sys­tem to en­sure there are no frauds. “This is es­pe­cially so be­cause we are of­fer­ing in­ter­net bank­ing and data is trans­mit­ted on the in­ter­net. We had en­gaged Tata Com­mu­ni­ca­tions Ltd to set up se­cu­rity in­for­ma­tion and event man­age­ment (SIEM) mod­ule to cover the en­tire gamut of cy­ber se­cu­rity is­sues we may con­front. In fact, the sys­tem has been some­what unique, be­cause ex­perts from NPCI vis­ited us to learn de­tails of the mod­ule so that NPCI can have its own sys­tem. We have bio­met­rics based ac­cess con­trol sys­tem and for in­ter­net bank­ing we have OTP as the sec­ond fac­tor of au­then­ti­ca­tion,” says he.

FINTECHS

JP Par­sik Bank in­tends to work with fintechs to bring in sev­eral in­no­va­tive ser­vices which it plans to of­fer. One of the ser­vices that Nayak men­tions is an app­based loy­alty pro­gram for its cus­tomers. “For ex­am­ple, we may of­fer loy­alty points to a cus­tomer who would opt for Digital mode in lieu of man­ual trans­fer of funds. Our aim is to have a com­pletely au­to­mated pro­gram for the pur­pose,” says Nayak.

An­other area where the bank may en­gage with fintechs is to of­fer cloud-based ser­vices.

Nayak says the bank is pro­gress­ing to­wards lesser use of pa­per for of­fice pur­poses. It has au­to­mated most of the of­fice pro­ce­dures. In­tra and in­ter-of­fice cor­re­spon­dence is through an in­tranet. The Loan orig­i­nat­ing sys­tem has re­duced pa­per work. The bank has also del­e­gated au­thor­ity for loan sanc­tion­ing and the process is han­dled at var­i­ous lev­els - at branches, at the HO com­mit­tee and at the

board de­pend­ing on the amount of the loan. Any loan above `10 crore only has to come to the board.

VI­SION 2020

“In 2013, we launched our Vi­sion 2020 pro­ject, ba­si­cally aim­ing to achieve a busi­ness turnover of `10,000 crore and a network of 100 branches,” says Nayak. “This is an am­bi­tious pro­ject which we wanted to ac­com­plish what may come. I am con­fi­dent we are on the right track. We had a turnover of `2800 crore in 2013 and a branch network of 38. Today, af­ter 4 years, we have al­most dou­bled our turnover and we have a network of 80 branches. In ad­di­tion, we re­ceived the multi-state sched­uled bank sta­tus. We have also in­tro­duced all the new gen­er­a­tion bank­ing ser­vices, which are highly rev­enue gen­er­at­ing. So, in an­other three years, we can again dou­ble our busi­ness vol­ume and set up 100 branches, although we may not re­quire these num­ber of branches. One fac­tor that is ad­van­ta­geous to us in that our NPA lev­els are neg­li­gi­ble. We hope to add more staff to our present strength of 760, which may ul­ti­mately touch 900 by 2020,” says he.

The bank has taken up a pro­ject mak­ing use of Six Sigma pro­cesses to en­sure cus­tomer en­gage­ment. Says Nayak: “We have sev­eral com­mit­tees to en­sure that a uni­form process is adopted by the staff while en­gag­ing with a cus­tomer. The com­mit­tees con­tin­u­ously as­sess the re­quire­ments of the cus­tomers and evolve method­olo­gies to meet these re­quire­ments. While the re­quire­ments go on chang­ing, the method­olo­gies to meet the re­quire­ments get re­fined and de­fined. The staff mem­bers are re­quired to fol­low the prin­ci­ples of the banks scrupu­lously and en­sure that there is no de­vi­a­tion.”

ROLE OF CHAIR­MAN, BOARD

“I had men­tioned about trans­parency in all the ac­tiv­i­ties of the bank. I be­lieve this was pos­si­ble mainly be­cause of vi­sion of the board of direc­tors we have. One note­wor­thy as­pect is that the chair­man or mem­bers of the board do not in­ter­vene in day-to-day de­ci­sions. They pro­vide guid­ance, frame poli­cies and over­see the func­tion­ing of the bank. The au­thor­ity to man­age and run the bank, like in a pro­fes­sional or­ga­ni­za­tion, is del­e­gated to the Com­mit­tees, CEO and his staff. Un­like in other co­op­er­a­tive banks, there is no in­ter­fer­ence in de­ci­sion­mak­ing. What the chair­man and board does is to en­sure that we the mem­bers of the staff fol­low the RBI spec­i­fied dos and don’ts for co­op­er­a­tive banks. This does not mean they lack in­volve­ment in the run­ning of the bank. They are very much ac­tive in en­sur­ing that the bank of­fers its prod­ucts and ser­vices to the cus­tomers in the most ef­fec­tive and ef­fi­cient way. There are many sub com­mit­tees of the board, which are ac­tively d in de­ci­sion mak­ing process at cor­po­rate level “says Nayak.

The bank has a strong Hu­man Re­sources Man­age­ment func­tion. As in other mat­ters, there is a very trans­par­ent pol­icy and de­ci­sion-mak­ing with re­gard to the peo­ple. HR func­tions are partly au­to­mated. Leave sanc­tion­ing, at­ten­dance, etc are done online. How­ever, ap­praisals, re­views and re­lated work is done man­u­ally. But, the bank has brought in modern method­olo­gies - like an of­fi­cer should al­ways dis­cuss with his sub­or­di­nate be­fore he pre­pares his ap­praisal re­port and doc­u­ments the views of the sub­or­di­nate in case of a di­vided opinion.

ONLINE TESTS

“We have a unique way in which we bring out the ca­pa­bil­i­ties of our peo­ple,” says Nayak. “We have with the help of a pro­fes­sional agency de­vel­oped Man­ual of In­struc­tions and sets of ques­tions from the man­ual for var­i­ous lev­els of staff based on 3 dis­tinct top­ics - de­posits, ad­vances and IT. The ques­tions are se­lected ran­domly for a can­di­date. They form the ba­sis of the assess­ment of the mem­bers of the staff. The staff mem­bers are ex­pected to un­dergo and pass these tests, con­ducted online, if they are as­pir­ing to be con­sid­ered for a pro­mo­tion. A staff mem­ber must pass tests in all the three top­ics men­tioned above. The tests are for clerks want­ing to be­come of­fi­cers and for of­fi­cers want­ing to be­come man­agers. In ad­di­tion, we also ex­am­ine con­fi­den­tial re­ports and in­ter­nal as­sess­ments of the staff mem­bers con­cerned while de­cid­ing on pro­mo­tion. I tell you the re­sponse has been tremen­dous,” says Nayak.

Skill devel­op­ment is a con­tin­u­ous process in the bank. A staff mem­ber must un­dergo a min­i­mum of one train­ing in a year. Es­sen­tially meant for skill upgra­da­tion, these train­ings are mostly done in-house with the help of external fac­ulty. The bank also de­putes se­lected can­di­dates for train­ing in out­side or­ga­ni­za­tions, like RBI’s train­ing in­sti­tu­tions and pro­fes­sional train­ing or­ga­ni­za­tions.

Nayak says the bank has an in­ter­nal union. There has never been a sin­gle in­stance of la­bor un­rest in the last 45 years. There have been no dis­putes and the wage re­vi­sion talks al­ways get con­cluded in 2 sit­tings without back­log. The in­volve­ment and com­mit­ment of staff for the good of the bank is be­yond ques­tion, he adds.

Sadanand Nayak points out that his bank had never had OTS and only few cases in DRTs

Launch of BBPS and Plat­inum RuPay card

In­side the branch of the branch

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