Syndicate Bank MD draws up growth, clean-up plans

MUMBAI: Syndicate Bank MD Mrutyunjay Mahapatra has drawn up a multi-pronged plan to clean up bad loans, improve advances and grow fee income. Mahapatra is one of the six SBI deputy MDs chosen by the Centre to head nationalised banks. The government had decided to tap SBI with the object of bringing some of the best practices of the country’s largest bank into smaller nationalised banks.To improve Syndicate Bank’s tier I capital adequacy ratio well over the 6.7% prescribed by the regulator, its committee of directors will meet on January 7 to approve raising Rs 500 crore by issuing equity shares to eligible staff members under an Employee Stock Purchase Scheme. This capital-raising exercise comes on the back of the government investing Rs 2,460 crore in two tranches.“The business plan is to build even as we are repairing,” said Mahapatra — who took charge in September 2018 after a career in SBI. As part of this mission, the bank has created a new stressed asset vertical. “What is unique about this is that while the government mandate is to refer loans above Rs 50 crore to the stressed asset vertical, we have decided to refer all loans above Rs 5 crore,” said Mahapatra. As a result, all troubled loans above this figure will be referred from the branch to the head office directly without having to go to the zonal or regional offices.To boost lending to small businesses, the bank has taken two new initiatives. First, it is tying up with fintechs to distribute loans. It has already tied up with Atyati Technologies, a fintech with a technology platform ‘GANASEVA’ to provide loans to hitherto uncovered medium and small enterprises for up to Rs 10 lakh. It has also tied up with SREI Equipment Finance, which has a lion’s share of the infrastructure equipment finance market in India. Under the partnership SREI will originate loans for Syndicate Bank. “Our approach is to go for partnership wherever we do not have the capability,” said Mahapatra.Finally, to boost fee income, the bank has tied up with SBI Life Insurance for distribution of products across the country. “We are looking at sales of 25,000 policies in three months,” said Mahapatra. The bank will do a proof of concept by selling policies in three zones before taking up sales on an all-India basis.

from Economic Times http://bit.ly/2BYOv4X