Arya­pu­ram Bank aims for R1000 cr biz

Arya­pu­ram Co­op­er­a­tive Ur­ban Bank, Ra­jah­mundry in Andhra Pradesh, has home loans is its big­gest busi­ness

Banking Frontiers - - Cooperative - Mehul@bank­ingfron­

Arya­pu­ram Co­op­er­a­tive Ur­ban Bank has 15 branches and 4 ATMs in the state of Andhra Pradesh. In 201617, the bank had added 3 branches and 2 ATMs, while it plan­ning to have 3 more branches by the end of 2017-18. Ac­cord­ing to Challa Sankara Rao, chair­man of the bank, 1 branch was opened at Danavaipeta, Ra­jah­mundry re­cently and 2 will be opened at Visakhapatnam and Gun­tur soon. ATMs have been com­mis­sioned at Danavaipeta and Kak­i­nada while it is plan­ning to have 2 more ATMs in 2017-18. The bank has shifted some of its branches from higher floors to the ground floors and had air-con­di­tioned the branches and given bet­ter interiors to them in the last 12 months, ac­cord­ing to Rao. The bank has 92 em­ploy­ees. Gode Sud­hakara Rao is the CEO at present. In 2015-16, the bank had 80 peo­ple on its rolls. Busi­ness per em­ployee had re­duced to `10 crore in 2016-17 from `10.61 crore in 201516. Chair­man Rao says the bank in­tends to re­cruit mar­ket­ing pro­fes­sion­als to han­dle busi­ness de­vel­op­ment at branches.


The bank had 1.68 lakh cus­tomers as of March 2017. It has re­duced in­ter­est rates on hous­ing loans, gold loans and mort­gage loans in or­der to at­tract new clien­tele. “We are hop­ing to in­crease our cus­tomer base to 2 lakh by 2018. We have in­creased re­pay­ment pe­ri­ods for hous­ing / mort­gage loans,” says Rao. The bank is an ‘A’ graded bank with own funds of over `71 crore and 90,000 share­hold­ers. It has been in ex­is­tence for 99 years, has CBS.

“We have our own 3-storeyed build­ing hous­ing our J.N. Road branch, which of­fers some 750 lock­ers, lo­cated on a sin­gle floor, for the cus­tomers. We are now in the process of con­struct­ing a 4-storeyed build­ing to lo­cate our head of­fice and the main branch. This build­ing will have all the lat­est fa­cil­i­ties, con­ve­niences,” says Rao.

Tech­nol­ogy Up­grades

The bank had im­ple­mented CBS from Fi­na­cus IT So­lu­tions. The bank had en­gaged So­mayagi Group as an IT so­lu­tions con­sul­tant. The bank is propos­ing to in­tro­duce mo­bile bank­ing and IMPS up­grade in 2017-18 and it has ear­marked `90 lakh. There are 6 mem­bers in the IT team. The ATMs of the bank are NCR make. It op­er­ates ATMs 24-hours-aday and all ATMs are manned by se­cu­rity per­son­nel 24-hours. 50 trans­ac­tions are hap­pen­ing per ATM per day.


The bank es­sen­tially serves low and medium in­come seg­ments, which forms its core clien­tele. These cus­tomers in­clude traders, work­ers and la­bor­ers for whom it of­fers credit at a lower in­ter­est rate. The bank’s de­posits stood at `577.28 crore as on 30 June 2017, up from `573.77 crore as on 31 March2017. Loans were `341.12 crore, up from `336.76 crore. The bank has achieved a growth rate of 9.39% dur­ing 2016-17 for de­posits and 3.80% for loans for the same pe­riod.

“We have given hous­ing loans of `260.98 crore (77.5% of the to­tal loans), gold loans of `40.40 crore (12%) and CC/ OD loans of `13.95 crore (4.15%). We have also fi­nanced `65 crore for an in­fra­struc­ture project iden­ti­fied by the Andhra Pradesh gov­ern­ment - con­struc­tion of a shop­ping com­plex in Ra­jama­hen­dravaram. We are strength­en­ing our hous­ing fi­nance and gold loans port­fo­lio in the next one year. The loan sanc­tion­ing time is only 4-6 work­ing days. Af­ter pre-sanc­tion­ing vis­its, loans are sanc­tioned to all el­i­gi­ble ap­pli­cants,” says Rao.

Npa Re­cov­ery

The gross NPA and net NPA of bank stood at `21.65 crore (6.81%) and `8.76 crore (2.87%) re­spec­tively as on 31 March2017. Rao main­tains that NPA re­cov­ery on an on­go­ing ba­sis is top pri­or­ity for the bank and all the staff mem­bers are per­son­ally in touch with the bor­row­ers to re­cover.

Third Party Prod­ucts

The bank has a tie-up with SBI Mu­tual Fund for sell­ing its mu­tual fund prod­ucts, United In­dia In­sur­ance Co for in­sur­ance prod­ucts to its mem­bers as well as bor­row­ers and Sri Ram Life In­sur­ance for group life as pro­tec­tor in­sur­ance prod­ucts. The non-in­ter­est in­come of the bank had sub­stan­tially de­creased from `77.63 lakh in 2014-15 to `45.75 lakh in 2015-16 but has bounced back to `56.32 lakh in 2016-17. Rao ex­plains that the bank has in­tro­duced Group Life Pro­tec­tor Scheme with low pre­mium to en­able bor­row­ers to get in­sur­ance pro­tec­tion against ac­ci­den­tal death or nat­u­ral death by which the out­stand­ing loan is cov­ered.

Tar­gets, Growth

The bank is tar­get­ing to achieve de­posits of `646 crore and loans of `401crore, that is, a to­tal busi­ness of around `1000 crore by March 2018. For March 2019, Rao says the tar­gets are de­posits of `724 crore and loans of `464crore, which would be a to­tal busi­ness of `1200 crore.

J. N. Road Branch

Challa Sankara Rao in­tends to re­cruit mar­ket­ing pro­fes­sion­als to han­dle busi­ness de­vel­op­ment at branches

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