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Struggling with Various Challenges Interview with T. K. Srivastava, Executive Director, Syndicate Bank

What is your assessment of the current situation in the banking in India?
The current banking environment is very tough and competitive. We could see emergence of highly varied financial products, which are tailored to meet specific needs of the customers in the retail as well as corporate segments. The advent of new technologies could see the emergence of new financial players doing financial intermediation. With new private bank licenses leading to new players the competition will get tougher. Due to slow economic growth, banking sector is facing challenge on rising restructuring and NPAs. All these bring pressure on the profitability & NIM of the banking system.

How do you view the Indian banking sector’s significance progress since nationalisation?
The banking industry in India has a huge canvas of history, which covers the traditional banking practices from the time of Britishers to the reforms period, nationalization to privatization of banks and now increasing numbers of foreign banks in India. After nationalization network of branches as well as volume of PSBs’ business recorded tremendous growth. Indian banking industry further underwent crucial transformation after liberalization in 1991, giving rise to entry of more and more private and foreign players in the Indian banking industry.

Where does Indian banking sector stand compared to the international banking sector?
The Indian Banking industry has to live up to a range of high expectations from several stakeholders, if we have to compete globally. Integration of global markets, thinning profit margins and fast changing consumer preferences are forcing Banks to redefine their business policies and adopt different strategies. There is a need to improve quality of services; inclusive growth, wealth creation, convenient banking and have to emerge as a financial conglomerate demonstrating low cost innovation in banking which have caught the world’s fancy. The average number of banking products per customers in India is significantly lesser than the global benchmarks. There is a significant potential for cross selling of products amongst all categories of banks in India. Indian Banks have yet to harness its full potentials to make a substantial impact in these entire arenas. The international banking sector was severely affected by the subprime mortgage crisis and the European crisis. All of them still to get out of the after effects of these two crises. Fortunately for Indian banks, Reserve Bank of India handled the situation extremely well so that the effects were very low. However, the tail wind effects has impacted the economy to a certain extent and thereby impacting the Banks performance.

Which are the thrust areas for banking sector in India?
Modern banking is getting increasingly complex and skill intensive, in the face of competition. The industry is struggling with various challenges like superannuation, attrition, recruitment, de-skilling and re-skilling. There is an urgent need to harness the skills of employees so that they may be able to handle multifarious banking job and can assume higher responsibility and duties. Secondly, PSBs have to grow in terms of market capitalization even during the times of global meltdown. Another emerging imperative for PSBs is to aggressively participate in financial inclusion drive which is a key national goal of the country.

What is the key issues facing Indian banking sector today?
One of the key issues which banking industry is now facing is asset quality. Over the next few quarters, improving asset quality and to maintain rigorous credit standards will continue to remain a key challenge for most PSBs due to muted credit growth, increase in NPAs and higher slippages. In an of sluggish industrial growth, rising inflation and a depreciating rupee; increasing the non-fund based business and to improve the NII and NIM are also some of the critical challenges which the banks are now facing.

How do you look at the future of Indian banking sector?
With the growth in IT sector and other IT Enabled Services, there is tremendous potential for growth in the banking sector within the country. A larger number of banks both in public as well as in private sector in the country would foster greater competition, and thereby reduce costs, improve the quality of service, promote financial inclusion and it would ultimately support inclusive economic growth. Indian Banking sector is, now, moving towards complete resurgence giving rise to universal banking concepts and financial conglomerate into an integrated financial system. The financial inclusion programme of the Government is also offering immense opportunities to the Banks for cross selling their products. Also our demographic composition is changing offering challenges to banks to attract young customers.

What will be the future strategy of Syndicate Bank?
We are giving main emphasis on increasing the retail as well as CASA deposit base. To achieve these objectives “Super Deal CASA Campaign” was recently launched for mobilizing maximum CASA deposits. We have proposed to introduce two new deposit products viz. Synd E-Term Deposit and Synd Flexi Recurring Deposit scheme in the near future. On advances side, our main focus is on increasing retail credit, mid corporate and SME credit. In this direction we have recently introduced five new MSME products viz. SyndDoctor, SyndMarble, SyndTextile, SyndCashew and SyndTransport. All these products are tailor made schemes to meet the credit requirements of different sectors. Recovery is also one of our key strategic areas. A special teams namely “Stressed Tiny Assets Recovery Team (START)” at all Regional Offices have been formed to increase the recovery and to resolve accounts, especially, with outstanding Book Balance of Rs.10 lakh and below, so that branch heads may concentrate on business development and resolving high value Non Performing Assets by meeting large borrowers. Bank is proposing to open E-lounges at strategic places all over India. Also centralized opening of accounts through Back Office process at important places is proposed to ensure quick opening of accounts and proper KYC compliances. Bank is eyeing products and taking steps to attract youngsters.

What would you advice your customer to be the best way to manage money?
Bank is having a bouquet of products to meet every requirement of the customers. The schemes are flexible. To quote a few products SyndNavaratna, SyndFlexi Current Account, Synd e-Trade (3-in-1 account for online trading) etc.

What are you doing about improvement of service of Syndicate Bank?
In our Bank the focus is “Customer First”. Bank is planning to have etiquette training for front line staff. Also to improve knowledge of the staff they are being trained at frequent intervals so that their interaction with customers is always fruitful. Customer complaints are attended immediately. We have a strong CBS platform for sustained delivery of customer service.

How do you see the banking industry in the year 2020?
India has a vast economy where financial services play a crucial role in boosting the growth. The banking industry in India has undergone metamorphic changes over the last few decades gradually moving from totally regulated environment to market driven competitive system. I foresee Indian banking industry to move from relationship oriented conventional banking approach to convenience and e-banking approach by the year 2020. Future banking will be more inclusive than ever before.

Priority sector credit targets have not been met in many cases…what is the reason behind it?
Our Bank is one of the few banks that have been consistently exceeding parameters set by the Government for Priority Sector Advances. We have confident that as on 31.03.2014 also we will be crossing the stipulated parameters.

What about recent initiatives of Syndicate Bank?
Bank has recently formed eight FGM Offices across India for improving turnaround time in the respect of credit proposals, recovery issues and to have close monitoring of Regional Offices. Bank has also opened two new Regional Offices. Bank is proposing E-lounges and will be initiating BPR. Lots of initiatives are taken in HR as this challenge is faced by all the PSU Banks. Training of staff in critical areas like credit and forex is taking up to improve their knowledge level. 

Any comments on Government policy?
Government is taking various steps to kick start the economy and thereby the industrial activities. The inflation is showing signs of downward trend and along with bold steps being taken by the new RBI Governor; things will only improve in the future.  

Have you any observation on any other issues?

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