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Increased Flow of Credit to MSME Sector Interview with V. Ashokan, Field General Manager, SyndicateBank, Kolkata

How has Syndicate Bank progressed in terms of setting up new branches?
During the year the Bank has added 317 brick and mortar branches to its network and the total number of branches (including London Branch) stood at 3251 as on 31/03/2014. These include 78 branches in under banked Districts and 63 branches in minority concentration Districts.

Out of the above, 8 branches are opened in the North Eastern Part of India during the year. Bank opened a branch in Daman and with this Bank has presence in all the states & union territories of India. Bank also opened Mid corporate branches during the year. Bank opened one all women branch at Makupura, Ajmer. With this the total number of all women branch comes to 4.

As per RBI guidelines, Bank is required to open 25% of the new branches at rural unbanked tier 5-6 centres. As on 31.3.2014, there is a shortfall of 10. These shortfalls will be made good within the next financial year (2014-15) to comply with RBI guidelines.

The domestic branch network consisted of 1032 rural branches, 856 semi-urban branches, 704 urban branches, 658 metro & port town branches.  ATMs installed reached to 1946 as at 31.03.2014.

Bank has opened 22 branches during Q1, FY 2014-15 taking total number of  branches opened to 3272 as at 30.06.2014 (including a branch in London) comprising of 1044 rural, 856 Semi Urban, 708 Urban and 663 Metro branches.  Bank has presence in all the States and Union Territories of the country.

Bank proposes to open 350 branches and 27 Mid Corporate Branches during the financial year 2014-15.

Bank is also approaching for permission to open branches in Hong Kong, Dubai Financial Centre, Johannesburg and China.

Bank has opened new Regional Office at Salem and shortly opening Regional Offices at Varanasi, Vishakhapatnam, Ludhiana and Shimoga also.

The bank has a customer base of 33.8 million as at March 31, 2014 as against 32 million at the end of the previous fiscal, registering a growth of 5.62 per cent.

We would like to know about some of the important targets fulfilled and achievements of the Bank?
We furnish here below some important parameters of our bank as on 31st March 2014.

Capital & Reserves
Bank’s authorized share capital stood at Rs.3000 crore and the paid-up capital Rs.624.58 crore (624584631 equity shares of Rs.10 each) during the financial year ended at 31.03.2014.

The Reserves and Surplus of the Bank increased from Rs.9939.39 crore in 2012-13 to Rs.11219.61crore in 2013-14 registering a y-o-y growth of 12.88 per cent over the previous year.

Net Worth
Tangible Net Worth of the Bank (excluding revaluation reserves) improved significantly from Rs.9296 crore as at March 31, 2013 to Rs.10393 crore as at March 31, 2014.

The Board of Directors of the Bank has proposed a Final Dividend of 30 per cent for the year ended March 2014. This is in addition to an Interim Dividend of 25 per cent paid in January 2014. For the whole year, the Total Dividend is 55%.  The total outgo in the form of dividend (inclusive of dividend tax) during the year 2013-14 was Rs.401.91crore as against Rs.471.85 crore of the previous year.

Business Growth
The global business of the Bank grew by 16.07 per cent from Rs.334779 crore in 2012-13 to Rs.388584 crore in 2013-14, whereas, Bank’s domestic business rose by 13.51 per cent from Rs.291337 crore in 2012-13 to Rs.330701 crore in 2013-14.

Deposit Mobilization
Global deposits of the Bank grew by 14.56 per cent from Rs.185356 crore in 2012-13 to Rs.212343 crore in 2013-14. Domestic deposits grew by 11.92 per cent from Rs.167055 crore in 2012-13 to Rs.186966 crore in 2013-14.

CASA Deposits
Domestic CASA deposits of the Bank increased from Rs.51926 crore in 2012-13 to Rs.55911 crore in 2013-14, registering a growth of 7.67 per cent. Percentage of domestic CASA to domestic deposits stood at 29.90 per cent as at 31.03.2014.

Credit Deployment
The Bank’s global advances rose from Rs.149423 crore in 2012-13 to Rs.176241 crore in 2013-14 registering a growth of 17.95 per cent. Domestic advances grew by 15.65 per cent from Rs.124282 crore in 2012-13 to Rs.143735 crore in 2013-14. The global credit deposit ratio stood at 83.00 per cent in 2013-14 as compared to 80.61 per cent of the last year. 
Priority Sector Advances increased from Rs.46437 crore in 2012-13 to Rs.52016 crore in 2013-14 forming 43.19 per cent of ANBC as against mandatory level of 40 per cent.
Direct Agriculture Advances increased from Rs.16018 crore in 2012-13 to Rs 18807 crore in 2013-14 forming 15.62 per cent of ANBC as against mandatory level of 13.50 Per cent.
MSME Advances increased from Rs.16428 crore in 2012-13 to Rs 19800 crore in 2013-14 registering a growth of 20.52 per cent.


The Bank has registered an increase of 3.29 per cent in Operating profit from Rs.3449.59 crore in 2012-13 to Rs.3562.95 crore in 2013-14.

Net profit of the Bank declined by 14.62 per cent from Rs.2004.42 crore in 2012-13 to Rs.1711.46 crore in 2013-14.

Employees’ Productivity
Business per employee of the Bank improved from Rs.12.57 crore as at March 31, 2013 to Rs14.30 crore as at March 31, 2014. Profit per employee stood at 6.83 lakh as at March 31, 2014 as compared to Rs.8.11 lakh as at March 31, 2013.

Income & Expenditure
The Bank’s total income rose by 9.02 per cent from Rs.18295.05 crore in 2012-13 to Rs.19945.21crore in 2013-14.
The Bank’s interest income rose by 8.76 per cent from Rs.17120.69 crore in 2012-13 to Rs.18620.33 crore in 2013-14.
The non-interest income of the Bank improved by 12.82 per cent from Rs.1174.36 crore in 2012-13 to Rs.1324.88 crore in 2013-14.
The Interest expenditure of the Bank increased by 12.12 per cent from Rs.11666.63 crore in 2012-13 to Rs.13080.51 crore in 2013-14.
Operating expenditure of the Bank increased by 3.87 per cent from Rs.3178.83 crore in 2012-13 to Rs.3301.75 crore in 2013-14.

Important Financial Ratios
a) The Return on Assets stood at 0.78 per cent in 2013-14 as compared to 1.07 per cent in 2012-13.
b) The Bank’s Net Interest Margin (NIM) stood at 2.79 per cent in 2013-14 as compared to 3.19 per cent in 2012-13.
c) The yield on advances of the Bank stood at 9.59 per cent in 2013-14 as compared to 10.51 per cent in 2012-13.
d) The cost of deposits of the Bank stood at 6.56 per cent in 2013-14 as compared to 6.83.per cent in 2012-13.
The Earning per share (EPS) of the Bank stood at Rs.28.21 in 2013-14 as compared to Rs.33.30 in 2012-13.
f) The Book Value per share of the Bank improved from Rs.175.12 in 2012-13 to Rs.189.63 in 2013-14.
g) Net NPA percentage to net advances stood at 1.56 per cent in 2013-14 as compared to 0.76 per cent in 2012-13.
h) Gross NPA percentage to Gross Advances stood at 2.62 per cent in 2013-14 as compared to 1.99 per cent in 2012-13.
i) NPA provision coverage ratio of the Bank stood at 70.02 per cent as at March 31, 2014 as compared to 83.41per cent as at March 31, 2013.
j) The Capital Adequacy Ratio (CRAR) of the Bank, as per Basel II stood at 12.01 per cent in 2013-14 as compared to 12.59 per cent in 2012-13. The Capital Adequacy Ratio (CRAR), as per Basel III stood at 11.41per cent as at 31.03.2014
k) Dividend on equity shares stood at 55 per cent in 2013-14 as compared to 67 per cent in 2012-13.

Our Bank has been recognised as “BANK OF THE YEAR” for its splendid performance by magazine ‘Investment Advice’ in its June 2013 issue.

Our Bank has been adjudged as “SECOND BEST PSU BANKS” by financial express India’s best banks survey 2012-13. 

Farmers clubs promoted by Gurgaon Gramin Bank - our sponsored RRB - were honoured by Hon’ble Chief Minister of Haryana by presenting a shield for its excellent performance.

Our Bank has been presented with an award as ‘Best Performing Bank in Implementation of SHG linkages programme’ in the state of Andhra Pradesh by Hon’ble Chief Minister of Andhra Pradesh, Shri N Kiran Kumar Reddy.
Bank has been conferred “Best Bank Award” amongst all the Banks in the RSETI movement by Sri Jairam Ramesh, Hon’ble Minister for Rural Development, Government of India.

Bank has been awarded “Banking Excellence Award 2013" for the second best public Bank in overall performance” by State forum of Bankers Club Kerala.

Bank has been awarded for Record Breaking Performance during Synd LIC Saptah (2nd to 7th December, 2013) by marketing 15119 policies Highest by any of the Bancassurance Partners during a week by Life Insurance Corporation of India (LIC).

Bank has been awarded “CIO Master 2013” – Certification of Recognition for its Business Intelligence by BIZTECH2.COM

Bank has been awarded “CIO 100 – ASTUTE 100 – HONOREE 2013”   for its Business -Technology – Leadership

Our Bank has been awarded as “Best Bank of the year” by Bangalore Management Association on its 61st anniversary award function on 25th May 2014, in collaboration with Dalal Street.

What is the Current deposit and advance ratio of the bank?

How has the bank made advancements in specialized branches, especially SME?
In tune with the guidelines issued by the Government of India and RBI, the Bank has taken steps for increased flow of credit to MSME sector. Total Advances to MSME sector stood at Rs.19799.80 crore as at March 2014, against Rs.16427.78 crore as at March 2013 registering a growth of 20.52%. Advances to Micro and Small Enterprises increased from Rs15074.10.crore in 2012-13 to Rs18697.08 crore in 2013-14 registering a growth of 24.03%. The total outstanding advances to Micro Enterprises constitute64.87% of advances to Micro and Small Enterprises Sector against stipulated target of 60.00%.

During the year, Five new Products was launched on 20th October, 2013 for  Micro and Small Enterprisers to provide focused thrust to identified sectors with reduced rate of interest and Margin. Rate of interest is reduced for MSME advances during the year to reduce the burden on MSMEs and to ensure increased credit flow to MSMEs Sector. 

MOUs signed and renewed with reputed Commercial Vehicle Manufacturers viz., Tata Motors, TVS Motors and Bajaj Auto Ltd, Force Motors and Piaggio Motors for financing commercial vehicles under Micro and Small Enterprises. In order to expand the credit to MSMEs and provide specialized service to the Sector, Bank has designated 69 numbers of MSME Branches as on March 2014.

What are the important CSR projects currently being undertaken?
Being a responsible social citizen, Bank recognizes its responsibility towards society and actively involved itself in various CSR (Corporate Social Responsibility) activities which aimed at socio-economic transformation, rural uplift & sustainable development of the society. Some of the Bank’s initiatives in the field of Corporate Social Responsibility taken during the year include donation to the orphanages for the disabled, viklang sahayata samiti, old age home, trust, temple, rural academy, hospital, charitable foundations for supporting their various social activities; distribution of mid-day meals to the underprivileged children; distribution of fans, water coolers/purifiers to Govt. schools; installation of solar lights and hand pumps in certain districts; donation towards assisting victims of natural calamities like flood etc. 

How much funds are allocated to the beneficiaries?
Bank has allocated 2% of net profit (approximately Rs.8.18 crore) posted during the financial year 2013-2014

The Prime Minister gas recently introduced the “’Jan Dhan Yojana’. How is Syndicate Bank associated with this scheme?
The Prime Minister Sri Narendra Modi has announced the PRADHAN MANTRI JAN - DHAN YOJANA as a National Mission on Financial Inclusion with an ambitious objective of covering all households in the country with banking  facilities and having a bank account for each household. This is important for including people left out into the mainstream of the financial system and launched the PMDJY and   launched on 28 August, 2014 across the nation simultaneously. Our Bank as whole opened 4,00,000 saving bank accounts under the Pradhan Mantri Jan Dhan Yojana  on 28.08.2014 . Our Bank is committed to achieve the target allotted by Minister of Finance, Govt. of India by 26.01.2015. Our all branches are conducting mega camp to open account under the PMJDY.

Are there any other important recent activities of the bank?
Our bank has reached total global business of Rs. 3,00,000 lakh crore on 31st March 2014 and Rupees four lakh fifteen thousand lakh  Rs.4,15,000 lakh crore on 30th Sept 2014. Our bank has aimed to achieve total global business of Rs.10,00,000 lakh core business on 31st march 2020. Keeping the Mission target 2020, we are giving main emphasis on CASA deposit & core deposit.  On advance side our main focus is on increasing retail credit, mid corporate & SME credit. Recovery & NPA recovery is also key strategic area. We have constituted STRAT team in each of the Regional Office to follow up with branches as well as borrowers where loan outstanding balance is Rs. 10 lakh and below. We are holding mega account camp in rural & semi-urban area on every Saturday under PMJDY.. We are going to celebrate the Banking foundation day on 20.10.2014. All rural branches are advised to organize ‘RURAL EXTENSION EDUCATION PROGRAME’ on 20th October 2014 to commemorate the 89th foundation day pf our esteemed bank.

What is the current state and developments in progress of the north-east sector?
One upon a time we were having 7 to 8 branches in the entire north east. There are 42 branches spread over seven states and having total business of Rs. 1100 crore as on date. We have planned to open five branches during the financial year 2014-15.

We would like to know some brief details about the bank’s schemes on Kisan credit cards?
As per the directions of RBI, Bank is implementing the revised guidelines of Kisan Credit Card under Syndicate Kisan Credit Card (SKCC) Scheme and the revised guidelines involve the following. 
Fixation of staggered limit for five years.
Provision for issuance of Cheque book and ATM / Debit Cards (Rupay Kisan Cards) which will enable the farmers to effectively transact their operations in their SKCC accounts.

The Bank has issued 1.40 lakh Syndicate Kisan Credit Cards during the year 2013-14. The cumulative number of Syndicate Kisan Credit Cards issued so far up to March 2014, excluding the renewals, is 16.25 lakh with a total credit limit of Rs.11014.11 crore. As at March 2014, Rupay Kisan Cards have been issued in case of 116903 operative SKCC A/cs.

Under Syndicate Kisan Samrudhi Credit Card Scheme, the Bank has issued 158 cards with a credit limit of Rs.1.97 crore during the year up to March 2014, which provides hassle free investment credit in addition to need based short-term credit.

What are the structures of Car loans, Home Loans and Educational loans that are offered by the bank?
Bank has given thrust on Retail lending particularly in card loans, Housing loans & Educational loans.  Having regard to the increasing incidence of default under this segment in recent years, Bank has taken steps to improve the quality of retail lending by tightening the norms.  Bank has adopted a cautious approach by moderating the growth in retail credit and focusing on due diligence process. For more details of the said retail products, customer may contact their nearest branch of the Syndicate Bank.

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