We'll do business of Rs 6,000 cr from the mid-corporate segment: Sudhir Kumar Jain

Interview with Sudhir Kumar Jain, CMD, Syndicate Bank

Manipal-based Syndicate Bank is eyeing mid-corporate, retail and SME (small and middle enterprises) segments to contain non-performing assets (NPAs), improve recovery and ensure more business in the present economic conditions. The bank, which posted 31 per cent decline in its net profit for the quarter ended March 31, is expecting to grow 20 per cent this year. In an interview with Shashikant Trivedi, Chairman and Managing Director Sudhir Kumar Jain said the bank was expecting Rs 6,000 crore through mid-corporate segment. Also, the bank will take QIP (qualified institutional placement) route in the second half of the year. Excerpts:

Market conditions do not bode well for banks, monitoring stressed accounts is a big issue and your bank isn’t an exception. How will you deal with it?

We have set up Stress Asset Recovery Team (START), which will target all accounts below Rs  10 lakh and will function in all regions. We have also strengthened our recovery department by appointing separate top level officers who will personally monitoring these accounts. Separate officers are there to look after only SRFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act) accounts. A few other officers have been deployed to personally monitor all individual accounts of Rs 25 lakh. We also have created SME department and put in place a system to monthly monitor all accounts above Rs  1 crore.

This way, we will monitor our stressed accounts. All these steps will help us contain our NPAs.

But at the same time you have to perform and maintain growth…

Yes. That is why we are focusing more on mid-corporate, SME and retail segments. We have now opened thirty new mid-corporate branches. For example, we have opened two new mid-corporate branches in Madhya Pradesh, one each in Bhopal and Indore. I am personally visiting all regions to explore possibilities. There is a huge potential in the segment.

What is your target?

I am personally meeting customers of various segments. We will be able to do business of not less than Rs 6,000 crore this year from the mid-corporate segment.

Are you focusing on power and infrastructure projects?

No. There are no new power projects coming up in the country due to various reasons.

As a result, we are choosy while considering funding new projects. We will soon fund some good road projects, provided they have 100 per cent right of way.

What about education loans? Will the segment remain unimpressive?

We are aggressive in the education loan segment, too, if subsidies are offered by the government like as in Madhya Pradesh. We have set up an annual growth target of 15 per cent.

Will you also tap potential in non-banking areas like financial inclusion?

We have more than nine hundred ultra small branches to be aggressive in financial inclusion. We have covered 2248 villages of 2000 population and have opened nearly seventy lakh basic accounts in various rural areas. We have good presence in financial inclusion programme.

How do you position your bank post elections?

If a stable government comes with complete majority, we expect the economy to look up and things will start moving ahead. Last year we have grown by 18%. This year we have set up target of 20% growth.

Will you raise funds from market too?

Yes we have QIP approval for Rs 200 crore but we will wait for an appropriate time. Our capital adequacy ratio is quite comfortable at 12.01% and our tier-I is 8.99%, so we will wait till our share price will reach to an expected level. We will raise funds in the second half of the year by September.