Syndicate Bank MD charts out plans to improve growth

Syndicate Bank MD Mrutyunjay Mahapatra, one of the six SBI deputy MDs chosen by the Centre to head nationalized banks, has drawn up a multi-pronged plan to improve advances, clean up bad loans and grow fee income.

The government has decided to tap SBI with the object of bringing some of the best practices of the country’s largest bank into smaller nationalized banks.

To improve Syndicate Bank’s tier I capital adequacy ratio well over the 6.7% prescribed by the regulator, on January 7 Syndicate Bank’s committee of directors will meet 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.

After a career in SBI, Mahapatra has taken charge in September 2018. According to him the business plan is to build even as they are repairing. The uniqueness is that while the government mandate is to refer loans above Rs 50 crore to the stressed asset vertical, they have decided to refer all loans above Rs 5 crore. 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 gear up 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.

To boost fee income, the bank has tied up with SBI Life Insurance for distribution of products across the country for looking at sales of 25,000 policies in three months. The bank will do a proof of concept by selling policies in three zones before taking up sales on an all-India basis.