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Offering borrowers a seamless, frictionless experience

Veraval Mercantile Cooperative Bank has 11 branches and a head office in Gujarat. The bank has extended its area of operation from Veraval district to entire Gujarat, with the aim of providing banking facilities to maximum people. The bank opened 3 branches – Bedi in Rajkot, Zanzarda Road in Junagadh and Dared in Jamnagar GIDC area recently.

The bank’s customer base increased to 97,555 at the end of the last FY. According to Atul Shah, GM of the bank, the bank has added 6295 new customers during 2018-19. The bank is aiming for 10,000 customers at the end of this financial year, he adds.
The bank has been regularly analyzing the needs of customers through market surveys. Says Shah: “We offer 30 different kinds of loans and overdraft products as well as different deposit products to cater to the needs of each and every section of the society.”
The bank has appointed a ‘Customer Friend’ in each branch. “This has resulted in a high satisfaction level among customers, which is measured by minimum complaints from customers,” says Shah.

The bank’s business has increased by 14.6% on a yoy basis to Rs.7.97 billion as on March 2019. Says Shah: “We have garnered deposits to the tune of Rs.5.32 billion as of Q2, up from Rs.5.02 bn in Q1 of the current FY, registering a yoy growth of 24.1%. Similarly, we have been able to extend loans to the tune of Rs.3.04 billion as of Q2, up from Rs.2.73 billion in Q1of the current FY, registering a yoy growth of 44.56%. Our deposit giving customer base has expanded to 94,695 and loan seeking customer base to 5335 at the end of first half of the current FY.”
The top sectors receiving loans from the bank are services, retail and small businesses. As on 30 September 2019, the outstanding amount of service sector loans stood at Rs.849.45 million, followed by retail sector loans at Rs.530.38 million and small business sector loans at Rs.247.10 million. The bank is expecting 20% growth in these sectors in 2019-20.
During 2018-19, the bank concentrated on financial inclusion of the young generation. For this, it has started accepting fees payable to reputed schools at its premises and has opened no-frills accounts for students. This has increased its business.
The bank’s deposits by 14.19%, advances by 15.29% yoy. It has secured 4th position in terms of business growth during 2018-19 among all the UCBs of Saurashtra region.

In the last 12 months, the bank has inducted several new technologies, including an HR module, loan delivery system and locker operation card system. Besides, it has deployed 200 PoS machines at the end of last FY and introduced new delivery channels – RuPay debit cards, and IMPS. It has also improved existing services like fund transfer, eStatement and passbook printing. Shah says it is now proposing to implement a document management system and targeting to increase PoS machines up to 500.

The bank has 3 members as part of the IT infra team and 2 for IT applications team. It has no on-site ATMs. It has partnered with Sarvatra Technologies for ATM cards. According to Shah, nearly 5% of the income is normally provided for IT budget. If there is any special requirement, then this budget may be increased. The bank uses software provided by Saraswat Infotech for CBS, AML, CTS, MIS, loan origination, etc. It uses data center facility provided by CtrlS at Mahape, Navi Mumbai. It has its DR site at Rajkot branch and is doing data de-duplication manually.

The bank has implemented CBS at all its 11 branches and has developed a core system integration protocol to reduce the steps and automate the lending process to offer a seamless, frictionless experience to the borrowers. It also has a centralized loan delivery system and in-house legal cell to deal with all the legal matters.
The appraisal report and ratio analysis are done by the system. The overdue and NPA statements are monitored weekly. “We maintain the demographic data of our customers so that we can do a segment-wise marketing,” says Shah.
The bank accepts only those loan proposals which have justified end use and applicants with repaying capacity, after analyzing with credit agency reports, project reports and CMA data. The rejection ratio is therefore very low.

To ensure that the branches improve business, the bank has defined appropriate growth targets, identified areas of growth, created a business and profitable growth portfolio and executed the growth strategy effectively. “Our targets for the current FY include mobilizing Rs.5.6 billion in total deposits and Rs.3.27 billion in total advances. We aim to open 3 new branches. We are also targeting that 50% of our customers will have our RuPay debit card. We will be issuing about 5000 debit cards by the end of 2019-20,” says Shah.

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