Nov. 29, 2009 (The Hindu Business Line) --
Alka Kshirsagar
Pune, Nov. 29
Pune-based Bank of Maharashtra (OOTC:BMHAF) recently entered its Platinum Jubilee year. In an interview with Business Line, Mr Allen C.A. Pereira, Chairman and Managing Director, spoke on the bank's business plans, efforts to reduce NPAs and measures to expand presence across the country. Excerpts.
Though BoM has a pan-India presence, it is still perceived primarily as a regional bank.
This is probably because, of the 1,437 branches, 800 are in Maharashtra. But we want to change this perception. We have obtained the RBI licence to open 80 new branches over the next one year. During the coming months, we will make our first entry into three North-Eastern States – Meghalaya, Arunachal Pradesh and Sikkim — and be present in 25 States. We will add a branch in Assam, and also expand our presence in Orissa, West Bengal, Rajasthan, Karnataka and Tamil Nadu.
I understand you want to give a push to your rural operations. Will this be your focus area?
My focus is to be a bank that is both a common man's bank, and also has facilities for HNIs. Most of our expansion will be in un-banked and under-banked areas.
In a slum in the Parvati area of Pune we are piloting a project to bring banking to the lower income group. We are working with an NGO, who will visit the area on a given day, and act as the business correspondent of the bank.
We have provided a handheld biometric device through which money can be withdrawn or deposited. We got around 100 new accounts on the first day itself. The trial will be extended to five centres across Maharashtra, and NGOs have been engaged on a proof-of-concept basis. This experiment is aimed at bringing people from the lower income group into the banking fold.
You also have a programme to provide training to youth in rural areas…
Through our five existing Mahabank Self Employment Training Institutes (MSETI) at Pune, Aurangabad, Nagpur, Nashik and Amravati, we have encouraged and trained 5,000 rural youth to take up self employment. Our target this year is to take this number to 7,000. We are setting up one MSETI in Betul, Madhya Pradesh.
Can you elaborate on your programme to adopt villages to aid development?
We have identified 75 villages, 50 in Maharashtra. We will be partnering with the panchayats, and try and organise training of women on health, hygiene and basic education. We want the villages to be self reliant on basic amenities.
As you know, the President of India, Ms Pratibha Patil, inaugurated a branch of BoM – the first bank (OTCBB:FRBA) in the village – at Hivrebazar, acclaimed as a model village, last week. We want to replicate the Hivrebazar model across all the 75 villages.
What are your targets for the fiscal which also happens to be your Platinum Jubilee year?
Our target is to do business of over Rs 100,000 crore by March 31, 2010. We want to bring all our branches — the number will touch 1,500 by March-end — under core banking. As of date, 820 are under CBS.
What is the extent of your NPAs?
Partly because of loan waivers and partly due to recession, currently our NPAs stand at Rs 1,200 crore, which is roughly 3.3 per cent. I admit this is high. The major areas of slippages are retail, agriculture and SMEs.
To tackle this we are training people to manage our bad debts. We have got a licence from the RBI to set up a total of five Asset Recovery Banks (ARBs) which will be headed by a senior officer of the level of an AGM. These will be exclusively dedicated to the task of recoveries. There are already two such ARBs at Pune, Mumbai and Delhi. Two more will be established at Kolkata and Aurangabad over the next two months.
Additionally, we have set up three special branches of what we call Retail Credit Hubs in Pune, Mumbai and Delhi. On a centralised basis these will facilitate due diligence, appraisal and sanctioning of loans in order to control NPAs.
With the objective of taking a focussed and qualitative approach to retail credit, we hope, in time, to set up at least 10-15 more such branches across India.
By March-end we want to reduce our NPAs by 25 per cent to Rs 900 crore.
