Chhattisgarh chief minister Raman Singh has been actively modernizing and promoting the state. Likewise, Chhattisgarh Rajya Gramin Bank chairman R.K. Gupta is equally active in growing and diversifying the bank.
Chhattisgarh Rajya Gramin Bank (CRGB), sponsored by the State Bank of India, was established in September 2013 after amalgamation of 3 banks. It is now the only RRB in the state, which is pre-dominantly tribal (45%) and one of the poorest. As many as 14 out of 27 districts are naxal-affected and they face acute problems about internet connectivity, transportation, etc
Mehul Dani: How many branches and ATMs do you operate? What was the past growth and future plans?
R. K. Gupta has set a target of crossing `13,250 crore in total business, ie per branch business of `21.5 crore
R.K. Gupta: We have 602 branches as on 31 March 2017 spread across all the 27 districts of Chhattisgarh. Of these, 559 (93%) are in rural and semi-urban areas. Of about 2714 branches of all scheduled commercial banks in the state, our share is 22.18%. We had opened only 2 new branches opened in FY2015, but we could open 13 in FY2016. Because of the delay in staff recruitment being done by centralized agency IBPS, we could open only 5 new branches in FY2017. We plan to add another 15 branches in the current year. The number of employees as on date is 2410. We have recruited large number (915) of highly qualified staff during the last two years. The number of trained staff has jumped to 831 during the FY17 which is 36% of total staff strength. With large scale induction of new recruits, the average employee age has come down to 42 years, which is a highly favorable demographic factor.
As regards ATM service, our customers can utilize the vast SBI ATM network, free of cost. However, to supplement and improve easy access of basic banking services in very remote/ difficult areas, we have deployed 287 micro-ATMs with Bank Mitras, providing door step digital banking.
What is the customer base at present? How do you propose to increase it?
We have about 78.49 lakh accounts serving approximately 50 lakh customers. The number of total accounts has rapidly increased over the last 3 years at 26% CAGR mainly due to opening of 29 lakh PMJDY accounts, which is one of the highest in the RRB segment. Our market share has improved from 5.77% to 6.09% yoy as per December 2016 data.
Our multipronged strategy to widen the customer base includes opening of additional branches, particularly in unbanked, naxal-affected areas. Our trained staff provides quality customer service. A wide range of IT products and services have been successfully rolled out for all types of customers during the last 18 months. We have rationalized our loan products and introduced new products like gold loans to public and loan against rent has been launched since last FY.
We have improved the ambience of 54 branches and we propose to undertake the same for another 80 branches during this year. All such initiatives have given us a competitive strength and tech-savvy feel to our customers.
What are the special features of your bank that distinguishes it from others?
We have the advantage of having more than 70% local staff which is working in their areas for long and therefore have earned customers’ trust. The merit list for new recruitment is being drawn on state level by the IBPS from FY17. We have promoted the Bank Sakhi model for providing Bank Mitra services. The female member of a successfully running SHG is chosen as Bank Mitra, is provided necessary hardware by the state government, training by our bank and total support by our link branches.
Due to our rural imprints, our CASA has touched 70.29% level in 2016-17, which is contributing significantly to our profitability. No other bank in the state is any way near this level.
We are the leaders in various financial inclusion initiatives of the central government. Under PMJDY, we have so far opened more than 29 lakh accounts. Under PM Suraksha Bima Yojana, we are the best in the state with more than 12 lakh people have been enrolled and there is 89% renewal persistency. We have covered 100% eligible borrower farmers which is the highest among all scheduled commercial banks. Under MUDRA loans to the weaker sections of the society, we did more than 225% of the allotted target for FY16. We also perceive financial inclusion initiatives as a great business opportunity. Aadhar base is also a great strength for the bank vis-a-vis other banks. From a meagre 1.67 lakh in December 2015, our Aadhar base has peaked to 31.5 lakh as of now. This covers about 80% of active savings accounts.
What is the total business in 2016-17? What are the main sectors that have received maximum credit?
Our deposits stood at Rs 9122 crore as on 31March 2017, which is a yoy net growth of 11.79%. The main contributor is CASA deposits of more than Rs700 crore mobilized during the demonetization period. Further, quantum jump in direct benefit transfer credits has added substantially to CASA growth.
Our advances stood at Rs2643 crore recording a yoy growth of 3.81%. After touching a growth of about Rs160 crore by September 2016, it has come down on account of heavy influx of deposits (particularly in loan accounts) due to demonetization. The growth also muted because of decline in KCC loan pick-up due to acute shortage of cash for a prolonged period.
Even after maintaining the enhanced priority sector advance benchmark (75%), we have significantly diversified and tilted our portfolio towards high yield – low risk personal loans. The share of P-advances in total advances increased from 31.69% to 36.13% during FY17 mainly driven by record growth in housing and car loans, which was fueled by an in-house competition called ‘Grih Sitara’ (an incentive to the staff). Since the directional change has brought about considerable growth and also reduced P-segment NPA substantially, we shall continue our emphasis on these products this year also.
What are the bank’s immediate plans to use information technology to improve business? How is the staff trained?
We have launched eCommerce facility on RuPay card in January 2017. We are on eKYC platform now. Micro ATMs and EMV chip cards have been started, which are firsts among 18 SBI sponsored RRBs. RuPay ATM transactions/hits have gone up by 61% yoy to 56.21 lakh. We intend to start loan processing units at RBO centers through CBS to streamline and standardize the loan sanctioning procedure with particular focus on TAT reduction.
We have dashboards for timely/ accurate and customized MIS for the controllers and branch heads for effective intervention and ascertaining the business potential, etc. Data mining through dashboard for generating business leads will significantly help us in exploiting our latent potential.
After roll-out of salary and leave module under HRMS, we plan to implement the claims/ bill payment module also. This will free staff from routine administrative jobs and they will be able to focus more on marketing and business growth. We intend to use eKYC for account opening through tab banking via our Bank Mitras.
As we are going on acquiring updated hardware, a budget of approximately Rs7 crore is provided during this financial year. Adequate number of IT specialist officers has been recruited. Training on CBS has been imparted to about 350 staff in the last 2 years. The count of staffs trained on area of functional banking has gone up from 648 to 831 in one year.
We organized some 161 Digi-FLAP camps in January and February this year to get feedback from our customers. There is satisfaction and delight among the customers for the service we have offered.
Our operating expenditure has actually declined by 7.36%. Due to large scale migration of customers to ATMs, our cash management issue has been resolved to a great extent.
The bank has earned a handsome income of Rs310 lakh during the FY17 compared to Rs3.88 lakh in FY16. A 79-fold increase in DBT incentive has helped us record a massive other income growth of 82% during CFY.
What are the names of the main IT vendors?
C-Edge Technologies is the main vendor supplying B@ncs 24, AML and MIS. IDBI Intech provided CTS services through NetTech Software. Our data center is located in a Tier 3 level data center facility in Mumbai. Our existing hardware supports 390,000 transactions per day.
How has been the NPAs and recovery performance of your bank?
Due to lack of adequate minor irrigation facilities, Chhattisgarh is predominantly a mono-crop (paddy) state. For the last 2 years, the state has been facing severe drought affecting farmers’ income. This has impacted their loan repayment capabilities. Managing and tracking the Income Recognition Asset Classification after recent amalgamation of 3 banks (sponsored by different banks) working on different CBS platforms has its own inherent problems. We have, therefore, started a balance sheet cleansing drive.
We had undertaken a special campaign for reduction of NPAs and HO/RO officials were deputed. The Chairman and general managers have also visited branches with high NPA. From a peak of Rs365 crore of gross NPA as on 04 January 2017, it came down to Rs275 crore as of March 2017. Recording of details of mortgaged land in respect of agriculture advances in government portal ‘BHUIYAN’ has been initiated and likely to be completed by May 2017. This could restrict multi finance/frauds/NPAs. Some 115 specialized recovery teams could recover a whopping Rs 135 crore during the last 2 years.
New revamped compromise policy for live and written off accounts has been put in place. For the first time, series of ‘AUCA-OTS’ (advances under collection account, one-time settlement) has been launched. Significantly, we have recovered Rs5.22 crore in AUCA during FY17 against Rs3.47 crore in FY16 (50% higher). The total recovery so far in DRT cases to tackle our 39 high-value NPA accounts is Rs40 lakh. Through National Lok Adalats, we recovered Rs13.41 crore. Action taken U/S 138 of NI Act in 1211 cases resulted in upgradation / closure of 547 NPA accounts by recovering Rs5.52 crore.
What are the bank’s policies and practices on HR, physical security of branches, admin, compliance and legal in 2016-17?
Value addition, skill development and motivation of the staff are the pillars of our every HR initiative. Transfer and promotion policy as per the government guidelines is in force and implemented in true spirit. All the promotions up to the year 2017 are completed in time. Training and capacity building is another critical initiative. Timely payment of terminal dues/ benefits is our supreme priority. After sustained efforts, we have attained almost nil pendency in settlement of these cases.
There has been maximum usage of HRMS for standardization as well as timely payment of salary, settlement of claims, sanction of leave, etc. To provide social security to the kith and kin of staff, the insurance coverage under Group Personal Accident Insurance Policy has been gradually increased and now we are providing maximum possible coverage in case of accidental death/ permanent disability.
Since RRBs are not supposed to employ branch guards as per NABARD policy, the security is basically electronic. For this purpose, CCTVs, sirens and fire extinguishers are installed.
A new, 11th RBO is proposed during this FY to balance the number of branches per RBO. We have the vendor empanelment policy for procurement of goods and services of better quality at competitive prices. Vigilance administration is another key area of our functioning. We believe in judicious and expeditious disposal of disciplinary action cases. For better monitoring of DP/court cases and faster disposal, we have appointed a specialist law officer. The pendency of cases was about 65 in August 2015. After my taking over as chairman since 01 September 2015 for a term of 5 years, 44 cases have been disposed off as on date.
Compliance of regulatory guidelines is given due importance. The bank has not breached in maintenance of CRR and SLR, PSL ratio, prevention of sexual harassment of women, customer grievance redressal, BCSBI Codes, etc.
Legal issues are handled with proper care and diligence. Regular review and follow-up is done. For better monitoring of DP/court cases and faster disposal, we have appointed another specialist law officer.
What are the targets for 2017-18? Please explain the strategy of business growth, expansion plans in the state?
Though the bank is flush with funds and credit off-take has been subdued, we have targeted a moderate deposit growth of 12% for FY18. We earn a lot through interest arbitrage. With our high ADHAR seeding rate (nearing 80%) we expect substantial deposits through DBT as well.
In order to improve upon the credit deployment ratio and meet the rising financial needs, we have targeted a higher loan growth of 15%. The growth is aimed in specific products like SHG, KCC, dairy, housing, PM Awas Yojana, car loan and MUDRA Yojana for MSE segment. We have already rationalized our important loan products, made them market competitive, started training the staff in a vigorous manner and product popularization through media, etc.
We plan to cross Rs13,250 crore total business giving us per branch business of Rs 21.50 crore. We are focused on bringing down the NPA to single digit level. We plan to earn a profit of Rs125 crore against net profit of Rs101 crore in FY17. We shall be engaging Bank Mitra directly, instead of engaging Corporate Bank Mitras, for better control and support.
