RegisteredOfficers’ with RNI, Voice, Delhi Regn. JuneNo. KARENG/2005/14831 2016 1 408 Vol 34 - 12 June, 2016 With the declaration of the financial results of the last year; both have more than doubled). These Bank for the year ended March, 2016 on 18th May, figures are independent of other stressed assets we became a part of writing a new chapter – an categorised as Restructured Assets. Collectively, ignominious record - of registering a net loss for the the total stressed assets pose great threat to the first time in the 110 years’ history of Corporation Bank’s asset portfolio. Bank. Even during the worst financial crisis faced Apart from the NPAs, Bank is facing another major by the Bank during the early 90’s, it never went challenge. The growth in business continued to be red. We can take shelter under the argument that near to NIL, this fiscal too registering an increase of several banks in public sector have posted losses only 0.31% and deposits only by 2.92%. and a few, very huge in quantum. But it will not The Branches have not yet been able to adapt to salvage the dent at Corporation Bank as we had securing retail business on a larger scale. Bank, stood apart from the rest, always in the past. having grown with the bulk for years together It is not that the Bank has incurred losses on its in the past, the recent efforts to divulge the bulk operations. There had been a 2.23% increase and re-orient towards retail have not yielded in Operating Profits over last fiscal. That with a expected volumes. Though bulk deposits have mere 0.31% increase in total business and more remarkably come down from 51.10% in March, importantly, with a 3.27% reduction in Advances 2015 to 45.50% in March, 2016, the extent of (Average Advances however increased by 5.79%), the reduction has only been compensated by the the Bank has increased its Operating Profit is truly retail business with the total business remaining commendable. nearly static. The Bank suffered a major hit due to extra-ordinary The positive achievements during the year shall provisioning and thus landed into Net Loss of not be lost sight of. More importantly: Rs.506.48 crores (down 186.69%). The provisions a. CASA grew commendably from 19.72% in for bad and doubtful debts alone increased by 2015 to 22.14% in March, 2016. Though the 186.99% at Rs.3431.42 crores as against an Bank might have planned to achieve higher, Operating Profit of Rs.3095.02 crores. Gross NPAs the present improvement needs to be viewed reached a record level of 9.98% as against 4.81% positively and from the angle of nominal growth last March. Net NPA reached a level of 6.53% (3.08% of deposits over last year. Editor Asso. Editor Members Advisor Edited and Published by Ekanath Baliga G. Raghuraman H.S. Vishwanath T.R. Bhat Ekanath Baliga Satish Shetty on behalf of the Owners : Printed by: Corporation Bank Officers’ M. Rajesh Dange Licensed to Post Under Organisation (Regd.) Codeword Process & Printers License MNG/128/2015-17 106, Lobo Prabhu Court Falnir, Mangalore - 575 001 & SK/MNG/WPP/7 Light House Hill Road, Mangalore - 575 001 e-mail: [email protected] Visit us @ our website:www.cboo.org Officers’ Voice, June 2016 2 b. Cost of deposits further improved from • The much awaited platform change has been 7.97% last year to 7.51% this year. eluding early implementation. The planned c. Reduction of bulk deposits (as stated above) gains of business after the transformation is another praiseworthy achievement. too thus have been delayed. Bank needs to d. The non-interest income of the Bank too surge ahead with more concrete and time- improved remarkably by 17.05% over last bound action to accomplish this ‘industry - year (from 1482.47 to 1735.16 crores). first’ project. The contributions from POS business, ATM • As known, business through technology Transactions and ATM Card renewal etc. only will be the future banking. The Bank are noteworthy – heralding a lucrative has already embarked upon this, launching source for future too. new products and improving upon the What next is the question troubling several existing ones. We need to give further thrust minds: to this which in turn will attract business • The NPA menace will be the major challenge and bolster our bottom-lines. to the Bank. The Bank needs to put all its For all these, the unstinted support from the energies in containing further increase of rank and file will undoubtedly be required. these NPAs on the one side and step up The Management needs to take all along- recoveries on a war-footing on the other. It with, with their hearts and souls put together. is relevant to mention here that CBOO had In the process of winning over everyone’s submitted a note to the then CMD in 2014 participation, the Bank management may also with a few suggestions from us to strengthen have to look into their immediate requirements the recovery mechanism of the Bank. and needs dispassionately. Any irritants at In the immediate past, the Management’s their satisfaction level, need to be removed with endeavours in recovery were more which the forward march will be eased. It will superficial than in gaining tangible results. be a ‘win-win for all.’ Collection of recovery data and tele-calling Lets work towards an early turnaround and from multiple points ruled the roost instead TOGETHER WE CAN. of the much needed guidance and human support to Branches in recovery. This needs OV to be set right on a priority. • The role of Branches in mobilising retail C O N T E N T S business (both deposits and advances) Page No. needs to be overhauled in this direction CBOO News ................................................... 4 with specific reference to smaller branches. Swasti .............................................................. 7 The Bank opened branches extensively in Obituary .......................................................... 8 2014 and early 2015 with the fond hope Banking Round Up .......................................... 8 of increasing the business in general and Article: CASA in particular. But the results were not on expected lines mainly because Why priority lending certificates won’t sell? 13 these branches were manned by either Grievance Redressal ..................................... 14 inexperienced or unwilling officers as Miscellany ..................................................... 16 Branch Heads. On the other side of it, a few Retirements .................................................... 18 Branches were provided with only one officer Discipline ...................................................... 22 (the Branch Manager) which too crippled the Article: Branch functioning. We need to extensively Consolidation of Public Sector Banks .......... 23 broad-base the business spread, support Class Room ................................................... 27 these branches in manpower, training, Circular Round Up ........................................ 28 guidance and the like. Top Management Health Watch ................................................. 31 needs to have a relook on branch expansion with single officer. In Lighter Vein ............................................... 32 Officers’ Voice, June 2016 3 SRI P V B N MURTHY IS OUR NEW CVO Sri PVBN Murthy, General Manager, State Bank in Mumbai and Chennai. He further became the of India has assumed charge as Chief Vigilance head of Taxation Department in SBI’s Corporate Officer of our Bank with effect from 11.04.2016 Office at Mumbai. For five years, he worked as on deputation, pursuant to the orders of the the head of Foreign Office of SBI in United States. Government of India, Ministry of Finance. He will He also worked as General Manager at SBI be in charge of the Vigilance Division. headquarters in Mumbai in charge of Shares and Bonds Department. A graduate in Science, Sri Murthy joined State Bank of India as a Probationary Officer in 1981. Born in October, 1958, Sri Murthy hails from He worked in several metro branches as Branch Andhra Pradesh. With a vast experience of 35 years Manager. He later moved as a Research Officer in in banking, our Bank will surely gain from his SBI’s Apex Training System at Mumbai. He headed expertise in the days to come. Large Corporate Credit Division and Forex Division CBOO wishes Sri Murthy a satisfying career in two of the largest branches of State Bank of India stint in Corporation Bank as its CVO. An ‘unfAir’ prACTICE BY BANKS A deduction of Rs12 from an individual’s bank account may seem inconsequential to most people, but “such a debit towards insurance premium without the account-holder’s consent amounts to deficiency in service,” ruled the Consumer Court, Tirunelveli. In its order, the court had directed a nationalised bank to pay Rs.10,000 as compensation for deficiency in service and mental agony and Rs. 4,000 towards cost of the case. Condemning the adoption of “such unfair trade practices” by a few banks, the Secretary of Coimbatore Consumer Cause, K Kathirmathiyon, said: “On a few occasions when customers questioned the deduction, the amount was refunded. Debiting thousands of accounts and later reversing the entry when a few voice their protest is unjustifiable. Many account-holders may not even be aware of such an irregular practice by banks,” the CCC Secretary said. Alleging that such suo moto debit is no mistake but a deliberate action, he said: “Debiting the account without the account-holder’s consent is a serious offence and crediting it back after representation does not absolve the bank of its illegality. The RBI, IRDAI and Central Vigilance Commission have already criticised banks for indulging in such an unethical practice.” While appealing to the account-holders to take up the issue seriously and lodge complaints with the RBI and the IRDA, Kathirmathiyon said that the CCC plans to take up the matter with the Government and, if necessary, go to court as well.