Shivalik success: work without lunch breaks

Reported by: |Updated: May 23, 2016

Suveer Kumar Gupta, MD & CEO, Shivalik Mercantile Cooperative Bank, Saharanpur in UP, elaborates how the bank had grown in short span of time and explains its targets for 2016-17

Suveer Kumar Gupta reveals that bank intends to be a model employer and emerge as a global role model
Suveer Kumar Gupta reveals that bank intends to be a model employer and emerge as a global role model

Mehul Dani: How many branches and ATMs of the bank operate in Uttar Pradesh at present?

We have 21 branches and 12 BC offices across Uttar Pradesh and Madhya Pradesh. We have 25 ATMs cum CDMs. We have applied to the RBI for branches in Hapur, Shamli, Noida and Lucknow in U.P. and Ujjain and Dewas in M.P. In addition, we have also sought permission to expand to Delhi, Haryana, HP, Rajasthan, Uttrakhand and Chandigarh.

What is the strength of your bank in HR? What skills are you hiring?

Our HR polices and processes are on par with those of commercial banks. For example, we offer quarterly performance pay linked to business targets. We have already implemented HRMS and a Learning Management System (LMS), perhaps among the first such implementations among banks of our size. We have moved to online employee appraisal in FY15-16 and will move to quarterly appraisal instead of annual appraisals from FY16-17. We hire skills in areas such as branch operations, credit appraisal, IT, internal audit and microfinance.

What are the key differentiators of your bank?

We give significant focus on our mission, values, principles and technology. We do not observe lunch breaks at any branch and work continues uninterrupted. Our business hours are 10 am to 4 pm every working day. Our mission is to serve the lowest strata of society with the best products at the best prices through the best technology-driven services. At the same we intend to be a model employer for the national industry and emerge as a global role model in the small banking sector. Our values and principles include ethical banking, strong professionalism, sound finances, good corporate governance, effective use of technology, excellent customer service and green banking.

One of the key achievements of the bank during FY 15-16 was BBB- rating from CARE Ratings. We are the first cooperative bank in the country to receive such a rating from CARE  for the excellence in the category of urban cooperative bank. The rating depended on several critical parameters like our long track record of operation, professional management team, comfortable capitalization levels marked by consistently high tier 1 CAR and moderate earning and liquidity profile. The recent rating is awarded for our strong management and promising banking operations over a long period of time. We have been creating several landmarks through easy banking procedures. The rating also took into account the limitations and risks associated with cooperative banking industry in general such as dual control, limited scale of operations along with geographical concentration. Moving forward, our ability to grow business, diversify operations, improve asset quality and maintain profitability will remain key rating sensitivities.

What is the total customer base of the bank as of Q4, 2015-16?

Our total customer base was more than 1.5 lakh for FY 15-16. We are committed to use technology to offer products and services to customers across all segments. We have invested heavily in IT infrastructure. We have a cloud based CBS managed by FIS. In addition, the bank has implemented audit management software and asset management software. In addition, we are in the process of rolling out Loan Origination System which will take care of the entire loan cycle. We also aim to digitize and reduce paper work and manual intervention wherever possible.

What is the total amount of deposits collected and loans extended?

As on 31 March 2016, the bank’s total deposits are to the tune of Rs809 crore while advances stood at Rs602 crore. We aim to expand the business size to Rs1700 crore. (deposits of Rs1000 crore + advances of Rs700 crore) in FY 16-17. Depending on the size and nature of a loan proposal, the appraisal process is conducted by different committees formed at branch and head office level. Each proposal is carefully examined and due diligence done before arriving at a decision.

Shivalik Mercantile Coop Bank officials talking to the local teachers at its office
Shivalik Mercantile Coop Bank officials talking to the local teachers at its office

Which were the top 3 sectors receiving loans from your bank?

Retail loans, micro finance and gold loans constitute the top 3 sectors receiving assistance from the bank. The total outstanding in these 3 sectors are approximately Rs 100 crore. We expect these sectors to grow by 50%. Our microfinance portfolio comprises 9000 groups covering approximately 1 lakh poor families across the districts of Saharanpur, Meerut and Noida in UP and Dhar and Indore in MP.

What new IT developments have been taken place in the last 12 months?

We are the first cooperative bank in the country to implement cloud based Direct RTGS/NEFT. We have micro ATMs to support instant account opening and financial, non-financial transactions at the customers’ doorstep. RuPay based debit card is accepted on all 3 channels – ATM, POS and Bill Desk. Besides HRMS, we have implemented e-registers to replace physical registers and GIS. We have green PIN generation, audit management system and solar energy to power ATMs / CDMs in rural areas during power cuts. We have implemented AML package, SMS banking for fixed deposits and Aadhar number registration via SMS.

Our technological targets for FY 16-17 include Loan Origination System, online verification of PAN and voters’ cards, corporate net banking, e-KYC, full mobile banking with mobile app, IMPS service to send and receive money via mobile phone, RuPay card integration to allow all e-Commerce, EMV cards and implementation of IPV6.

Which is the CBS that is being used? 

We have ‘Profile’ from FIS. Earlier, we were using ‘Suvikas’, powered by V Soft Technologies.

What brands of ATMs are being used in your channel?

We use WINCOR and NCR. We have engaged Dz Cards and Morpho for ATM cards printing. We use CCTV cameras and employ security guards to man ATMs. Because of our focus on technology, we have been very quick to implement Aadhar based payments. The bank is geared to receive benefits under the DBT scheme. In addition, it has added facility to update Aadhar number vis SMS. Updation of Aadhar via net banking is also expected to be rolled out shortly.

What is the NIM of your bank during the last 3 financial years?

The NIM during 2012-13 was 3.20%, in 2013-14 it was 4.28% and in 2014-15, it stood at 4.22%.

What are the third party products offered by the bank? 

Currently, we are offering general, health and life insurance products and forex. We now intend to add mutual funds and demat services to enhance income from third party products. We are also aligned with the Oriental Insurance Company (for general insurance), Star Health & Allied Insurance Company (for medical insurance) and HDFC Standard Life Insurance Company (for life insurance).

What is the NPA situation of the bank?

Our net NPA was 0.6% for FY 2015-16. Senior management has initiated a daily review of over-due/stressed accounts/NPA accounts. In addition, our recovery section has initiated a process of daily or weekly recovery in stressed accounts depending on customer profile and loan type. We have also employed recovery agencies in certain areas to aid in the recovery efforts.

What according to you is the future of cooperative banking in India?

I am of the view that cooperative banks would need to adopt technology rapidly in order to compete with the existing and upcoming banks. In addition, cooperative banks would need to focus on HR and training extensively.