‘Technology Can Combat NPAs Menace in Banking’

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Mrutyunjay Mahapatra
Mrutyunjay Mahapatra, Managing Director and Chief Executive Officer, Syndicate Bank

Tech-innovations are capable of bringing about a revolutionary shift in Non-Performing Assets’ management in our country. Our NPA tracker, at Syndicate Bank, has been put in place field functionaries for monitoring the follow-up of NPA accounts says Mrutyunjay Mahapatra, Managing Director and Chief Executive Officer, Syndicate Bank, in conversation with Elets News Network (ENN).

You have been a part of India’s largest lender. How challenging or exciting is it for you to be associated with Syndicate Bank now?

 It is both challenging and exciting. My experience with the State Bank of India (SBI) for over three decades provided me with the foundational inputs for facing any challenge and make it exciting as a personal and professional new venture. As the head of Syndicate Bank, one of the really venerated names in the Indian banking industry, there is a lot that I can do.

In SBI, I led and ran various business and functional verticals from credit to International banking to digital. Here, I am responsible for everything. The ability to conceptualise and implement transformation, bring innovation to reality, connecting with the people at grassroots, managing shareholders, customers and regulatory expectations synergistically have been the major excitements in the last six months that I have been with the Syndicate Bank.

What major changes did the bank witness in terms of retail quality post your appointment?

 In Retail, the quality shifts are in revamping products, processes and building partnerships. In products, we are targeting loans that are capital lite and low risk weightage. We have strengthened our presence in the Housing Loan segment with the formation of a dedicated Housing Loan vertical and special focus on targeting affordable housing and tying up with builders for project approvals and appointing home loan counselors. We have reviewed and tweaked all retail loans to reduce Turn Around Time (TAT) at branches and Retail & MSME Loan Centers (RMLCs).

We are also mapping key customer journeys to ensure end-to-end digitisation in retail products. Our `Feet on street’ – Sales Saathi App is also being leveraged for driving sales apart from ramping up of our sales team at regional offices. We are working on partnerships for co-originations and adopting best practices, we are training employees in modern and millennial oriented customer service and bringing digital and user experience in all customer-facing channels, be it digital or brick and mortar.

 Kindly apprise us about the new deployments in terms of technologies. Utilities like Loan Origination System (LOS) – Loan Application Processing System, Non-Performing Assets (NPA) Tracker, Early Warning Signals (EWS) have been significantly enhanced and revamped. Bank’s website, Internet Banking and Mobile Banking have already been decluttered. For older application versions of modules like internet banking and mobile banking, new and market-leading products from reputed organisations like Oracle and C Edge Technologies have been contracted. Our Core Banking System (CBS) is also undergoing a major version upgrade.

The process has been started to enhance and upgrade our Data Warehouse Project into a market leading Data Mart and Data Lake capability to serve our business aspiration of being a data and analytics-driven bank. We have also recently launched `Live Chat’ through which our customers can chat with our Contact Centre Executives 24X7 for their queries. We are significantly enhancing our data capabilities. Many of the new initiatives are taken by our employees under an ‘Internal build’ programme’ or under Fintech collaborations, under which we are working with about six fintechs who are doing major work for us. Internal hackathons, innovations, working with new technologies like cloud and Bot and AI are coming in a big way.

How significant are the deployed tech innovations in controlling NPAs?

It is a known fact that technology and data analytics need to be leveraged to identify red flags and early warning signals. Tech innovations are capable of bringing about a revolutionary shift in NPA management in our country. Our NPA tracker has been put in place for field functionaries for monitoring the follow-up of NPA accounts. Our online One Time Settlement (OTS) portal ensures both transparency and speed. We are deploying a world-class solution for Early Warning signal. Our Sales solution has been integrated with NPA tracker to provide synergy between sales and recovery staff.

What are your plans in terms of capital conservation? What would be the major areas of concern for the rest of 2019?

Capital efficiency is one of our key focuses. Hence, the need to both deploy and conserve capital judiciously has been implemented with corporate credit to A and above entities moving up significantly by nearly 8 percent in the last three quarters and we propose to continue the risk mitigated growth approach. For conservation of capital, we are also planning our credit growth in such a way that advances that carry low capital requirements like-Home loans, retail credit, advances guaranteed by Central /State Governments, advances with financial collaterals and advances to top rated borrowers grow.

 We are also concentrating on NPA reduction of high value advances. On deployment front, our focus is on SLR investments and investments with low Modified Duration to reduce the specific and general risk capital requirement of the bank, so that we require minimum regulatory capital on MTM losses. The major areas of concern, for rest of 2019, will be increasing and sustaining the bottom line to compensate the loss of last two years for return on equity for shareholders, and provide actionable guidance and execute on it.

Our immediate goal therefore is substantial growth in business levels. The next point of concern is keeping NPA levels manageable as we grow, without repeating the mistakes of the past. The emphasis would be to bring down NPA percentage as a parameter in every business unit. We shall also be concentrating on increasing our MSME where our performance has been less than satisfactory.

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