Re­tail growth at PSB

Banking Frontiers - - News - Mehul@bank­ingfron­

Pun­jab & Sind Bank has launched new schemes and is am­ing for growth across var­i­ous sec­tors and ge­ogra­phies

Pun­jab & Sind Bank has launched new schemes and is am­ing for growth across var­i­ous sec­tors and ge­ogra­phies:

Pun­jab & Sind Bank has ex­tended to­tal ad­vance of `12,165 crore through 28,010 loan ac­counts as of Q2 2017, which rep­re­sents a 8.37% growth yoy. The share of cor­po­rate loans (53.60%) is the high­est in the to­tal loans of the bank, fol­lowed by SME (17.54%), agri (16.12%) and re­tail (12.74%).

Says Fa­reed Ahmed, ED of the bank: “We are con­fi­dent of achiev­ing all reg­u­la­tory tar­gets by De­cem­ber 2017.”

Hous­ing loans lead in the seg­ment wise yoy growth of re­tail loans with 11.71% share (`4914 crore). This is fol­lowed by auto loans with 9.9% (`1214 crore), mort­gage loans with 5.25% (`6882 crore) and ed­u­ca­tion loans with 2.78% (`275 crore) as on Q2, 2017-18. The re­tail loan port­fo­lio of the bank has grown sus­tain­ably dur­ing 201718, com­pared to the pre­vi­ous year and un­der the gen­der based re­tail loan port­fo­lio, the share of fe­male cat­e­gory has in­creased by 10% over the last year. Fur­ther, the bank’s pri­or­ity sec­tor port­fo­lio has in­creased by around 5% over the last year.


Pun­jab & Sing Bank has been fo­cus­ing on im­prov­ing the ef­fi­ciency of loan pro­cess­ing. It op­er­ates spe­cial­ized re­tail lend­ing branches at dif­fer­ent lo­ca­tions to im­prove the qual­ity of pro­cess­ing and re­duce TAT. Says Ahmed: “Our fo­cus is on TAT, with­out com­pro­mis­ing on the qual­ity of ap­praisal. Most ap­pli­ca­tion forms for loans, par­tic­u­larly re­tail loans, have been made avail­able on our web­site. We in­tend to make the pro­cesses more user-friendly, based on cus­tomer feed­back.”

The bank has been en­sur­ing that there are suit­able tie-ups with each and ev­ery res­i­den­tial project fi­nanced by the bank. Ahmed says the bank has in­tro­duced a scheme for pay­ment of busi­ness fa­cil­i­ta­tion charges to builders and ve­hi­cle deal­ers for sourc­ing hous­ing loan and ve­hi­cle loan pro­pos­als. Fur­ther, the scheme is also ex­tended to ex-em­ploy­ees of the bank who help source these loans.

The bank is still short of its re­tail loan tar­gets by 6% in 2017-18. Short­falls in tar­gets were ob­served un­der the zones hav­ing max­i­mum num­ber of metro and ur­ban branches. Ahmed is con­fi­dent that with con­certed ef­forts and ini­tia­tives at all lev­els and with the aid of spe­cial credit cam­paigns, at­trac­tive of­fer­ings un­der Fes­ti­val Bo­nanza Scheme, mar­ket­ing, pro­mo­tion ac­tiv­i­ties and me­dia cam­paigns, credit off­take un­der re­tail will im­prove dur­ing the next quar­ters of the cur­rent FY. Says he: “At present, re­tail ad­vances con­sti­tute around 13% of our to­tal ad­vances; how­ever, we are now fo­cus­ing on a com­plete trans­for­ma­tion from be­ing a whole­sale bank to be­ing a re­tail bank.”


The home loan seg­ment is the ma­jor growth con­trib­u­tor for the bank un­der the re­tail loans port­fo­lio. It ac­counts for 36% of the to­tal re­tail loan port­fo­lio as on 30 Septem­ber 2017. Home loans also grew by 12% yoy. The share of home loans in re­tail loans has also been grow­ing dur­ing the last 5 years for the bank: “The share has in­creased from 31% in March 2014 to 36% in Septem­ber 2017 - from `2974 crore to `4914 crore. We have also seen a con­stant im­prove­ment in our pri­or­ity sec­tor home loan port­fo­lio over the last 5 years,” says Ahmed.

He feels that with the in­tro­duc­tion of en­act­ments like RERA and Be­nami Trans­ac­tions Act, there will be more trans­parency and in­tegrity, which will en­able the home buy­ers to buy prop­er­ties of their choice at af­ford­able prices. The bank is geared to ex­ploit this op­por­tu­nity, he says.

The home loan port­fo­lio has also grown in 2017-18 - 12% in­crease over the last year. Ahmed main­tains that each and ev­ery zone has shown a pos­i­tive growth in this port­fo­lio and un­der the gen­der based home loan port­fo­lio, the share of fe­male cat­e­gory has in­creased by 11% over the last year. The pri­or­ity sec­tor port­fo­lio too in­creased by ap­prox­i­mately 6%. He says the bank is strictly fol­low­ing the steps suggested by the cen­tral gov­ern­ment to pro­vide thrust and en­cour­age­ment to the af­ford­able hous­ing seg­ment.


Pun­jab & Sind Bank has been putting ef­forts to­wards grow­ing its busi­ness. Dur­ing 201718, it has in­tro­duced sev­eral new schemes aimed at giv­ing a greater push to re­tail both de­posits and ad­vances - through CASA cam­paigns, Fes­ti­val Bo­nanza Schemes, combo loan of­fers for ve­hi­cles and hous­ing as well as new re­tail prod­ucts. It has also in­tro­duced third party prod­ucts. “One such ap­proach, which is ex­pected to yield great re­sults, is our push for sell­ing of prod­ucts as a pack­age, ie, in­clu­sion of ADC

(Al­ter­nate De­liv­ery Chan­nel) prod­ucts along with tra­di­tional prod­ucts. We have en­tered into cor­po­rate agency tie-up for in­sur­ance busi­ness with LIC and SBI Life In­sur­ance Com­pany. As mar­ket­ing alone is not suf­fi­cient, we are com­ple­ment­ing the same with full fo­cus on cus­tomer ser­vice and griev­ance re­dres­sal,” says Ahmed.

The bank has in­tro­duced 3 dif­fer­ent schemes in 2017-18 to give a fur­ther boost to the re­tail seg­ment. These are PSB SME Liq­uid Plus Scheme, PSB Vya­par Loan Scheme and PSB Mort­gage Loan Scheme un­der which the bank has col­lec­tively given ad­vances to the tune of `270 crore till the sec­ond quar­ter, says Ahmed.


Ev­ery field staff in the bank is ex­pected to be a mar­ket­ing per­son. Ahmed says in or­der to give the req­ui­site boost to busi­ness ac­tiv­i­ties, the bank has formed teams of of­fi­cers to fo­cus on MSMEs, re­tail and forex busi­nesses at iden­ti­fied cen­ters. It is mak­ing use of print me­dia, hoard­ings, ban­ners, etc in or­der to get deeper pen­e­tra­tion in the mar­ket. Ahmed men­tions that the bank would soon have its own pres­ence in the so­cial me­dia plat­forms like Face­book even as it is mak­ing max­i­mum use of SMS fa­cil­ity to reach out to cus­tomers.


The de­fault rate in re­tail loans and hous­ing loans as of Q2, 2017-18 is about 10% and 6% re­spec­tively. “The yoy de­fault rate for re­tail loans has in­creased by 1.58%, ow­ing to the cur­rent mar­ket sce­nario. The re­tail loan port­fo­lio is be­ing closely mon­i­tored to ar­rest fresh slip­pages, says Ahmed”


Be­ing a north-based, the bank’s loan port­fo­lio is ge­o­graph­i­cally con­cen­trated in Pun­jab and Delhi. The in­cre­men­tal re­tail tar­get for FY 2018 is around `4000 crore, says Ahmed, main­tain­ing it is now a con­stant en­deavor to ex­pand the port­fo­lio across all ge­ogra­phies / sec­tors uni­formly.

Fa­reed Ahmed ad­mits there is in­crease in de­faults in re­tail and home loans, mainly be­cause of the mar­ket sce­nario

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