Syndicate Bank has set its sight on reducing the Non Peforming Assets by ₹1,000 crore to ₹1,500 crore in the next six months to turn the bank into a profit mode, says its Managing Director Mrutyunjaya Mahapatra.
Addressing a media conference here on Saturday, Mr. Mahapatra said that the bank with a business of ₹4.8 lakh crore and workforce of 35,000 employees — with 65% of them below 35 years — hopes to break even by March-end and turn profitable by June by reducing its NPAs.
The bank has a team of 1,500 people working exclusively for recovery of NPAs under the Recovery and Rejuvenation vertical and there were eight such branches across the country directly reporting to the corporate office. Hyderabad zone did well in recovery of NPAs of ₹578 crore against the target of ₹258 crore and it has ₹47,800 crore business.
Mr.Mahapatra disclosed that the bank’s gross NPA was 12.9% and net NPA 6.8% and they hoped to bring it down to below 12% and 6% respectively by March. The bank was thinking of giving share purchase scheme to its employees to raise ₹500 crore to ₹600 core in the next few weeks.
On the strategy to become profitable, he said the bank was focusing on retail, MSME and agriculture sectors and reduced its portfolio in corporate banking from 50% to 45%. “The group is driven primarily by housing loans, MSME loans and entered into number of good partnerships in the recent past,” he said.
On impact of loan waiver announced by some State governments, he said they already held negotiations with Karnataka government on the quantum of waiver the government would give and number of instalments and the ‘’hair cut’’ banks have to take on bad loans and NPAs.
They were yet to start negotiations with Chhattisgarh, Madhya Pradesh and Rajasthan governments. However, he said they found that ‘Rythu Bandhu’ and ‘Kalia’ schemes of Telangana and Odisha governments of direct transfer of assistance was benefiting people more. As the debt waiver would affect the credit culture, they were working with State governments, RBI and GoI for a proper mechanism.
He said bank was going slow in opening new branches and only after careful analysis about the potential profitability. Asked about plans on new recruitment, he said the bank’s workforce was quite adequate and they were not looking at aggressive recruitment and only maintenance recruitment in place of those retiring.