Vysya Bank is considering a proposal to merge its subsidiary, Vysya Bank Housing Finance Ltd, with itself.
"The bank itself is offering housing loans leading to duplicity of services," president V Raghunathan said, adding "The merger can bring better efficiency leading to a more focused approach at lesser cost."
The subsidiary does not have a large customer base, but the management believes the merger will boost the bank's housing finance business.
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Meanwhile, the bank's financial services subsidiary has received the Reserve Bank of India's approval to sell insurance products of its joint venture ING Vysya Life Insurance.
"This is an important development as it will help us to promote our insurance products," Raghunathan said.
Further, Vysya Bank is streamlining its operations, which involves a voluntary retirement scheme (VRS) and a Rs 60 crore automation drive.
Raghunathan said the bank is being restructured to make it lean and fit. "Within a short period, we will be indistinguishable from any other foreign bank," the bank president said.
The restructuring is two-pronged. One part looks at the organisational structure, while the second involved changes in the management.
While the brass features new faces, the organisational structure is geared towards a relationship mode. Raghunathan said the backoffice operations has been computerised with a call centre being set up.
Under the automation programme, the bank is investing around Rs 60 crore for computerising its 400 branches. By June 2002, about 200 branches, covering around 85 per cent of the bank's business, will be computerised.
Raghunathan said the 3.8 per cent target set for net non-performing assets may not be achieved and may be around 4.7 per cent for the current financial year.
The bank with a Rs 700 crore net worth has a capital adequacy ratio of around 12 per cent and expects to make a profit of around Rs 70 crore in the current fiscal.
Raghunathan said the recently announced VRS will lead to an outgo of around Rs 40 crore, which will be amortised over five years. He said the downsizing, by 25 per cent, will take place over three years.