What is your plan for development?
We have started the verticalization of our branches. We are looking at around 250 retail loan points, which will be retail only. We are also looking at around 125 MSME loan points, 30 large-corporate branches and 60 mid-corporate branches. The whole thing should be around 550 to 600 branches. The retail branches will receive the loans and remit them to these centralized units, which will do the processing and even disbursements. Large corporate branches will look at loans of ₹250 crore and above, and MSME branches will look at business up to ₹50 crore. This will help us to focus on loan growth and free employees from all mundane activities. We are also taking out all the NPAs of ₹20 lakh and above from branches and putting them in specialized branches, which will have law officers, credit officers etc. So, as soon as the account becomes an NPA, it will move on. The branches will also be digitally linked with the post offices. Once the notices are issued they will be automatically sent to the post offices to be sent to the defaulters.
Union Bank’s NPA is still the highest in the banking sector…
Yes, we are outliers at 10.22% (of Gross Advances) and we want to reduce it further to at least 9%. This is an area of ​​concern that I am working on. Plus, at 36% CASA (Current Account Savings Account), we are one of the lowest in the industry. We have 450,000 housing loan customers, and about 80% of them have only less than ₹10,000 balance in their savings account. So, they have asked us to keep at least three installments with us. We are also looking at their ancillary businesses to see if we can take their salary accounts, can we give them equipment finance etc. On November 11, we will roll out direct through processing on Mutual Funds, Insurance, Mudra Loans, GST and personal loans. We are also looking at reducing NPAs NCLT Process or outright settlement or upgrade. I will take care of it before coming into my NPA portfolio. We have classified NPAs into three categories – A, B and C, with A which we will be able to recover for sure and C which is a bit difficult for us. We are working on recovering some numbers.
How will all these changes help in credit growth?
I’m also looking at increasing my advances to something like 10% to 12% growth in the current year. I called each of my employees to get two retail accounts. We have been able to disburse over 3,500 crore retail loans in the last month through our own employees, which is more than ₹1,800 crore we obtained through DSAs (Direct Selling Agents) last year. But this is just a simple matter. My staff is involved and inclusive growth is taking place. Everyone wants to be a part of the growth story of this bank. And they know that growth is happening, as you say credit is going up.
There is a perception that private sector banks have an edge as they are going places they have not gone before. They have started going into the interiors, which has been your strength…
We know we are losing ground there and we are picking up. We have also now tied up with around 25 fintech companies, which we want to grow to around 100 by the end of the year. We have a subsidiary company and I am going to recruit for marketing from there. We have a very good spread of branches in the south, and here also, 45% to 50% of our branches are in rural centres, and we will activate that.