BCG to chart out UTI Bank recast, retail push

UTI Bank has appointed Boston Consulting Group (BCG) to work on its organisational restructuring and retail banking.

This is even as the bank is looking at more than doubling its branch network to 500 branches and expanding to all the district headquarters in the country in the next three years.

"The balance sheet has been growing continuously at a rate of 40 per cent in 14 out of the last 15 quarters. Also the employee strength of the bank has now increased to around 3100 employees. The bank has become more complex and a fundamental organisation redesign is needed," UTI Bank's chairman and managing director P J Nayak told Business Standard .

The bank had appointed BCG two years earlier to rework its corporate and retail banking strategies. BCG had helped the bank in setting up a risk management department and an internal rating for all the corporate clients.

The bank currently has a three tier structure"" branch, zone and central office.

"We have been able to keep the structure reasonably flat. We would like to have an effective structure for the next level of business," said Nayak.

On the retail banking side BCG would help the bank in the segmentation of the customer business and marketing of the relevant products to these segments.

"The customers of the bank can be segmented into different groups like salary accounts, priority banking, salary accounts for government employees and defense personnel and for different professions like doctors etc. This will help us to do a formal segmentation of the data from a business strategy point of view," said Nayak.

Of the 3100 employees, around 40 per cent of the employees of the staff are involved in the sales function.

Compared to other banks which employs direct selling agents, the bank employs its own sales staff .

BCG will help the bank in customer segmentation, product level profitability and increasing the sales orientation.

In the next 15 months the bank is also looking at doubling its branch network and its ATM network.

The bank has a current branch network of around 226 which includes around 56 extension counters in 106 towns and cities and 1140 ATMs.

"In the next three years we would like to have branches in all the district headquarters of the country. We are looking at a network of around 500 branches," said Nayak.