Bank outreach

LONG before corporate social responsibility (CSR) became a buzzword among Indian corporates eager to advertise their commitment to social causes, Canara Bank had quietly and with little fuss embarked on worthy social causes. In fact, even before Ammembal Subba Rao Pai founded the Canara Hindu Permanent Fund Ltd in July 1906, he was already well regarded as a passionate promoter of education. He was associated with several institutions—including the Canara High School, the Canara Girls’ School, the Canara Hostel, the Mangalore Union and the Depressed Classes Mission—founded to promote worthy social causes. To paraphrase a famous corporate tagline, he also founded a bank. In that sense, the idea of the bank being a socially responsible corporate citizen was sewn into its DNA at the time of its founding.

The idea of setting up the Canara High School was born in

Madras (now Chennai) where

Subba Rao Pai had his collegiate education, including his qualification as a lawyer from the Madras

Law College. The school started functioning from June 30, 1891, and Subba Rao Pai was among the trustees of the board. It functioned from rented premises before shifting to Dongerkery Road in Mangalore (now Mangaluru).

Today, the school functions from a large campus in the heart of the city. In 1894, Subba Rao Pai founded the Canara Girls’ School.

Canara Bank established the

banks did in the last few years. Barring a few power projects, the bank does not have much of an exposure to infrastructure projects that have become unviable or lack adequate equity support from promoters of the projects. Remarkably, for a bank that is based in Bengaluru, it did not lend to the now-defunct and scandal-hit Kingfisher Airlines. Part of this is explained by the bank’s “conservative” lending philosophy, as Manoharan explains in the accompanying interview. But this is not the only reason why Manoharan appears optimistic about the future.

Clearly, there are other reasons for being hopeful in a time of stress for most banks. In order to deal with the stress in the Indian banking sector, the RBI now has a Prompt Corrective Action (PCA) framework that identifies ailing banks at the earliest. The PCA is triggered Canara Bank Jubilee Education Fund (CBJEF) in 1956 in commemoration of the bank’s golden jubilee. The fund was initially meant to offer scholarships to students, particularly girls. Later, a book bank was established in Bengaluru, which now has nearly 14,000 textbooks for students preparing for professional courses. It has more than 9,000 members. Under the bank’s CSR initiative in 201718, the bank has contributed Rs.3 lakh for a book bank in Sagar and Rs.2 lakh for the one in Bengaluru.

In 1961, the bank sponsored the Canara Bank Relief & Welfare Society (CBR&WS) to run holiday camps for rural children. The CBR&WS later transformed into a big institution that runs Sevakshetra Hospital, a home for abandoned children called Mathruchhaya and an oldage home in Bengaluru. Under the CSR initiative of the bank, an amount of Rs.35.6 lakh has been released for 201718 towards renovation of the society’s Braille Resource Centre in Bengaluru.

Canara Vidyajyothi is a scheme specially formulated to provide scholarships to meritorious girl students from Scheduled Caste and Scheduled Tribe categories and it was launched in 201314. The scheme is implemented through rural, semiurban and urban branches of the bank. A total amount of Rs.14.38 crore has been distributed since inception until March 2018. Nearly Rs.4 crore has been released as scholarship for the year 201718. The bank has also contributed Rs.41.69 lakh for the Swachh Bharat scheme.

A Special Correspondent

when banks breach regulatory requirements pertaining to three key parameters: minimum capital adequacy, rate of return on assets and a threshold for the proportion of non-performing assets in a bank’s books. Of the 21 public sector banks, 11 are under the PCA framework, which restricts their operations. It is possible that Manoharan’s confidence arises from the fact that Canara Bank is not under the PCA framework. Crucially, this implies that the bank is in a position to benefit from opportunities for credit growth because several of its competitors would be unable to participate in lending activity. Although Canara Bank’s net NPAS are currently higher than the prescribed norm, the bank is confident of reining them in soon. Naturally, the portion of the business that may have gone to other banks may come to Canara Bank. $