How effective has your revival plan been so far?

Our basic strategy has been to increase business by 20 per cent every year. In the last two years, we managed an average growth of 18 per cent which is in line with the industry average and much better than the 10 per cent growth clocked by our bank in the decade to 1997.

Reduction of NPAs was one of the major objectives of your revival plan. What is your record in this area?

Efforts to reduce NPAs are continuing. We were able to control NPAs in 1997-98. Now we have actually brought it down in 1998-99 despite accretions of nearly Rs 180 crore. In the current year our target is to bring down the NPAs by at least Rs 300 crore against Rs 190 crore reduction in1998-99.

Recent studies have discovered that suit-filed cases for NPA recovery by banks have largely been infructuous. How have you tackled the issue of recovery?

You are right. We have scored major gains by going all-out for compromises. In fact, 85 per cent of our cash recoveries of Rs 130 crore in 1998-99 have come from compromise settlement of borrowal accounts. There is also a spin-off benefit here. We recover money which is released for other NPAs and brings down our overall provisioning requirement.

Can you elaborate on the cost control measures adopted by you?

We have controlled costs to a great extent and this is evident from the stagnating ratio of 'other costs' to net working funds. Circulars have been issued to keep stringent controls on administrative costs like telephone, fax and travelling.

What is the outlook for the current year?

Our basic thrust is on development of business so that our unit cost comes down. We have a 20 per cent annual growth target. Themain objective is to secure low cost funds in the form of savings/current deposits which at present forms 45 per cent of our overall deposits. We intend to raise this component to at least 48 per cent by the end of the current year. On the credit side, our target is for an expansion of about Rs 1200 crore, out of which nearly Rs 200 crore should go towards financing small traders/businessmen. In fact, we are aiming at higher trade advances and housing loans where the yield is higher between 15-17 per cent and there is greater security.

What other initiatives have been taken to increase income?

We have gone for infrastructure financing in a big way and as on date we have an exposure of about Rs 600 crore to projects in the power, roads, oil and petroleum sectors. We are also in an advanced stage of negotiation with IDFC for sharing lending risks.

What was the rationale underlying the decision to have five `operational head offices' for the bank in major metros?

Several agencies werecommissioned to advise on restructuring the bank organisation and all were in favour of decentralisation. This scheme was approved by the board (which includes a union representative) in June 1997. On an experimental basis, we started two offices under the supervision of GM (operations) in Calcutta in September 1997. The bank's board cleared the scheme for full implementation in April this year.

How is the bank going to benefit from this re-organisation?

The most obvious benefit will be greater field level control with each general manager having two zonal offices under him (earlier there were only two GMs to look after five zonal offices each) and a maximum of 10 regional managers. The posts of zonal managers will be eliminated. The headquarters of the bank will concentrate only on policy matters. We will have five GM (operations) once the scheme is fully implemented by the end of 1999. Out of 14 zonal managers, we have six in the ranks of DGMs. Since we have a sanctioned strength of 11 generalmanagers against 7 at present, some of the DGMs may be promoted. The benefit in the long run to the bank will be a leaner organisation leading to substantial reduction in overheads.