In­draprasta Coop Bank ....................

Pro­poses to add branches:

Banking Frontiers - - Highlights - Me­hul@bank­ingfron­tiers.com

In­draprastha Sehkari Bank is a Del­hibased co­op­er­a­tive bank with 5 branches and head of­fice. It started its busi­ness with just one of­fice but to­day at least one of its branches op­er­ate from its own premises. The bank pro­poses to add 2 more branches in the mid­dle class ar­eas in 2019-2020.

The bank is ef­fec­tively con­trolled and man­aged by an ef­fi­cient and qual­i­fied board of di­rec­tors un­der the chair­man­ship of D.K. Ag­gar­wal.

Ac­cord­ing to Ra­jeev Gupta, MD of the bank, the bank has 100 em­ploy­ees at present. Busi­ness per em­ployee in­creased to `35.3 mil­lion in 2017-18 from `33.4 mil­lion in 2016-17. He feels the bank needs to have bank­ing cor­re­spon­dents for busi­ness de­vel­op­ment in the branches.

CUS­TOMER BASE

The bank, which has been in ex­is­tence for 29 years, has 32,403 cus­tomers as on 31 March 2018. It is an ‘A’ graded bank with 10,329 share­hold­ers and own funds of over `292.9 mil­lion. Gupta says the bank is tar­get­ing to in­crease its cus­tomer base to 34,000 by March 2019. The 5 branches of­fer some 1231 lock­ers to cater to re­quire­ments of its cus­tomers and the head of­fice and main branch are equipped with lat­est in­fra­struc­ture fa­cil­i­ties and cus­tomers’ lounge.

STRENGTH­EN­ING LOANS

The bank serves the low and medi­u­min­come level groups, who form its core clien­tele. These sec­tors in­clude trad­ing com­mu­nity, work­ers and labour­ers to whom the bank has been of­fer­ing credit at a lower in­ter­est rate. It also ex­tends ad­vances to needy per­sons in­clud­ing small scale in­dus­tries, other in­dus­tries, busi­ness­men, re­tail traders, gen­eral traders and self­em­ployed per­sons for var­i­ous pur­poses. It has re­duced in­ter­est rates on hous­ing loans from 10-11% to 8.3-8.4%, mort­gage loans from 13-14% to 10.50-11.50% over a pe­riod of time so as to at­tract new cus­tomers. It has also been of­fer­ing new de­posit schemes with in­ter­est rate of 8%.

The bank has granted loans to the pri­or­ity/weaker sec­tions as per the limit pre­scribed by the RBI. The loans in­creased to `1.22 bil­lion as on 30 March 2018 from `1.09 bil­lion a year ago, reg­is­ter­ing a growth rate of 12.05%. De­posits stood at `2.1 bil­lion, down from `2.14 bil­lion. Says Gupta: “This was mainly due to with­drawal of de­posits dur­ing the de­mon­e­ti­za­tion pe­riod. We have in­creased re­pay­ment pe­ri­ods for mort­gage loans. We are also strength­en­ing our busi­ness loans and hous­ing fi­nance for the next 12 months. Our loan pro­cess­ing and sanc­tion­ing time is only 4 to 6 work­ing days. Af­ter pre-sanc­tion­ing vis­its, all el­i­gi­ble loan hold­ers are of­fered loans.”

TECH­NOL­OGY UP­GRADES

The bank has im­ple­mented CBS. It is of­fer­ing its own RuPay debit card, NEFT / RTGS re­mit­tances, mo­bile bank­ing etc. The RuPay debit cards were in­tro­duced in 2015. The ATM tech­nol­ogy ven­dor is Sar­va­tra Tech­nolo­gies. It has a tie-up with Axis Bank for of­fer­ing ATM, RTGS, NEFT ser­vices. The bank has also in­tro­duced SMS alerts and email bank­ing fa­cil­i­ties. Gupta says im­ple­men­ta­tions of mo­bile bank­ing and in­tro­duc­tion of IMPS are planned for 201819. At present the bank has a 4-mem­ber IT team.

RE­DUC­ING NPA

The gross NPAs and net NPAs of the bank are `55.83 mil­lion (4.56%) and `27.23 mil­lion (2.28%) re­spec­tively as on 31 March 2018. The yearly re­duc­tion in gross NPA is `18.67 mil­lion in 2017-18. The bank has al­ready ini­ti­ated ac­tion un­der the SARFASI Act against NPA ac­counts.

Says Gupta: “NPA re­cov­ery is a top pri­or­ity for us. Staff mem­bers con­cerned with the resspec­tive NPA ac­counts are per­son­ally in touch with the bor­row­ers to re­cover over­due in­stal­ments and make the ac­counts reg­u­lar. We hope in this fi­nan­cial year we would be able to re­duce the NPA amount no­tably.”

THIRD PARTY PROD­UCTS

The bank has tie-ups with Bar­oda Pi­o­neer, L&T MF and Axis MF for of­fer­ing in­vest­ment propo­si­tions for its cus­tomers. Un­for­tu­nately, the non-in­ter­est in­come of the bank de­creased sub­stan­tially from `21.2 mil­lion in 2016-17 to `19.4 mil­lion in 2017-18.

BUSI­NESS TAR­GETS

The bank is tar­get­ing to achieve a to­tal busi­ness of around `3.69 bil­lion by the end of March 2019. Says Gupta: “We are tar­get­ing to achieve de­posits of `2.34 bil­lion and loans of `1.35 bil­lion by the end of the cur­rent fi­nan­cial year.”

Ra­jiv Gupta is planning to add mo­bile bank­ing and IMPS ser­vices to its of­fer­ings for its cus­tomers this year

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