Bengaluru-based Syndicate Bank, one of the first public sector banks to have set up an all-women branch decades ago, besides introducing various products catering to women customers, is now opening up to small entrepreneurs in a big way. TK Srivastava, executive director, Syndicate Bank, tells Sunitha Natti that his is probably the first bank to have an exclusive product for small hotels, bakeries and canteens. Excerpts:
How’s the bank’s overall business growing?
Our global business increased to Rs 4.38 lakh crore, while operating profit increased by 9 per cent. Our total global deposits registered an annual growth of 29 per cent and our cost of deposits stood at 6.78 per cent during April-December, 2014. On the other hand, total advances rose 19 per cent annually, while yield on advances stood at 9.42 per cent during the first nine months of the current fiscal.
Are there any tailor-made products to attract customers?
Recently, we have introduced SyndHotel that offers loans up to Rs 10 crore for small hotels, restaurants, lodges, dabhas, bakeries, canteens at competitive interest rates. We might be the only bank exclusively catering to this set of customers as we see there’s tremendous business potential. Similarly, for housing loans, we have launched a special product waiving third-party guarantee, processing and documentation charges and also by lending at base rate of 10.25 per cent irrespective of tenor and amount.
Is there specific focus on MSME segment?
Currently, the Micro, Small and Medium Enterprises (MSME) contributes about 20 per cent to the bank’s overall customer base. If you look at MSE alone, it’s about 10 per cent and we intend to increase this to 20 per cent by the end of the next financial year. We are holding region-wise MSME customers to interact with customers and give on-the-spot sanctions. For instance, last month, the bank sanctioned 72 MSME proposals in Hyderabad aggregating to Rs 250 crore in one day. We have even reduced interest rate for MSME sector and waived 50 per cent processing charges for all the products.
What’s the status of NPAs?
Our gross and net NPAs stood at Rs 6,724 crore and Rs 4,370 crore respectively during the third quarter of the current fiscal. During this quarter, we restructured corporate accounts worth Rs 3,083 crore. We have minimum exposure to the troubled infrastructure segment and don’t have exposure to airline companies either, which leaves us with lower NPAs. Agriculture and industries comprise a significant 19 and 47 per cent respectively of our total NPAs as on December, 2014.
What credit growth is the bank targeting?
For the next financial year, we are targeting a credit growth of over 15 per cent. As for branch expansion, we will have over 3,500 operational branches by the end of March.
Will the bank raise capital to meet Basel III norms?
We should be able to raise at least Rs 1,000 crore additional tier I capital by the end of March. We also have approval for tier-II bonds aggregating to Rs 1,100 crore and we should be able to raise this capital next fiscal. With this, we will be able to comply with the Basel III norms.