Allahabad Bank has roped in the National Institute of Banking Management (NIBM), Crisil and Ernst & Young (E&Y) for development of human resource management, risk management and general business strategy for the bank, respectively.
Chairman and managing director (CMD) B Samal said, "We appointed NIBM last month, while Ernst & Young was involved a couple of months back and Crisil was put to the job few months back."
The inputs from these entities can be expected to provide some support to Allahabad Bank's plan to issue its initial public offering (IPO) in June 2002, after it has declared its annual results for 2001-02. The bank has been putting off the issue for some time now.
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"We will have no problem on the subscription front for the IPO will be for Rs 85 crore only," said Samal. The bank has already received the green signal from regulatory authorities.
NIBM has been asked to formulate a human resource policy as the bank will be requiring 100 probationary officers in a couple of years. Its recent voluntary retirement scheme (VRS) led to departure of nearly 700 officers. Another 100-odd officers retire every year as the average age of officers at Allahabad Bank was at a high 47 years against industry average of 45 years. "This would create shortage of officers," explained Samal.
The bank had not recruited officers in the last four years. Further, each officer needed at least five years experience before taking charge of a branch. The bank would need to replace retired officers with fresh recruits of 100-120 every year. "All these require elaborate human resource policy at the management level," explained Samal.
Crisil has been engaged to work out risk models involving various risks. "This will help reduce NPAs and develop the right instruments for each sector," said Samal.
Ernst & Young has submitted a draft report on specific areas of operations and locational services. The firm would help identify activities for specific bank branches and suggest business strategies at that level. Allahabad Bank will formulate strategies on the basis of recommendations made by E&Y.
Allahabad Bank expects to close 2001-2002 with a turnover of Rs 34,000 crore against Rs 30,000 crore in the preceding year. On advances, the bank expects to disburse an additional Rs 1000 crore, while on the deposit front it expected a Rs 2000 crore rise.
"We expect to register modest growth because we have taken a conscious decision not to take in high cost deposits, neither have we charged high rates of interest from our clients", said the CMD. Non-performing assets (NPAs) were also expected to remain last years level.