A new approach to winning customer trust

Reported by: |Updated: May 12, 2020

In times of coronavirus crisis, here is an innovative approach of mixing health and wealth

Saju James

At a time when cooperative banks have received adverse publicity, there is some refreshingly good news from a small city service cooperative bank in Kozhikode in Kerala. Calicut City Service Cooperative Bank, in less than 2 decades of operations, has made its mark mainly through several of its welfare-centric activities even as it recorded phenomenal growth by all major parameters. Set up in 2003, the bank has 26 branches and only one ATM, all confined to the boundaries of Kozhikode city. Despite the sluggish economic conditions leading to an overall slower credit growth in the country, it has been able to register a healthy growth of 10% in the last 2 years in deposits and almost 9% spurt in advances. Its business turnover has reached Rs22 billion.

Saju James, general manager, explains that the bank has a dedicated team 200 plus staff, 12-hour working time (8 am to 8 pm) in 21 of its important branches, working on Sunday in 4 branches, 365-day working in 2 branches and mobile banking, which is offering basic banking facilities through a mobile van moving around key localities in the city.

Narayanankutty, chairman of the bank, attributes the growth of the bank primarily to the unrelenting support of customers and the unwavering focus of its staff on social commitment.


The bank has unique health-oriented deposit schemes, which have received well by the customers. Saju James says its City Care Deposit Scheme aims to help people afflicted by cancer. Under this scheme, people in the 18-60 age group can, on a deposit of Rs 10,000 or its multiples, avail of free cancer treatment (including hospitalization and medicines) for a sum of up to Rs500,000, at the bank sponsored health unit, MVR Cancer and Research Center. The facility is available till such time the deposit, which is interest-free, is regularly renewed and can go on till the person attains 70 years of age. Likewise, its City Charity Scheme allows needy and poor people to avail of free dialysis at its dialysis center.

For the bank’s regular SB account holders, there is an added attraction – a higher interest rate of 5% and a free accident insurance cover up to Rs 25,000. The latter is, of course, available only to depositors in the prescribed age group.

The bank’s advances have also spurted from about Rs4 billion to about Rs10 billion during this period. Its net profit rose from Rs20 million to Rs 35 million.

The bank has loan schemes like Gold Safety, City Kissan, Abhiman, Vidya Amritam, Vidya Dhanam, Lady Cool, Lady Freedom, etc. While most of these schemes are available in one form or other with other banks, what makes those of Calicut City Cooperative Bank popular is the 1% incentive the bank pays for prompt repayment of the loans.

In 2003, the bank introduced a loan assistance scheme for people to get cooking gas connections. Some 6000 persons were assisted with a small sum of Rs 2000 each for this purpose and the scheme became popular and highly successful. Another feature of the loans is the cap placed on customers, particularly individuals. The ceiling or cap varies from loan to loan but as a rule, for gold loans for individuals, for instance, it is fixed at Rs 2.5 million, and for home loans, Rs 5 million. Generally, the bank aims at granting micro advances. Its CD ratio has been very high, at almost 90%.


Saju James says all loans, irrespective of the amount, are closely and strictly monitored. Each branch staff member is required to monitor 8-12 loan accounts every day, thereby ensuring repayment on time and, if need be, take necessary recovery action immediately.

Moreover, as all these loans are granted not to outsiders but only to the bank’s members, the bank is in a position to know their full history and background. This helps to a significant extent to understand and analyze the genuine difficulties faced by them and take necessary corrective actions immediately, at the incipient stage itself.


The bank, says Saju James, preferred to have a local service provider to meet its technology requirements. This firm has been a pioneer in inducting technology in the cooperative banking sector and has tie-ups with leading IT firms in Bangalore. The bank’s data center is in Kozhikode, while its DR site is in Bangalore. It has CBS covering all its branches and all banking operations and administrative matters are fully computerized.

In the matter of alternate banking channels like mobile banking and internet banking, the bank on its part is ready to introduce these and has applied to RBI for permission.

Saju James is confident that by 2025, the bank will achieve a 50% growth in both deposits and advances. The deposits should then touch the Rs20 billion mark and advances Rs18 billion level. As for net profit, it is expected to touch Rs50 million – a conservative figure since its aim as a cooperative bank is not to amass profits.

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