How did it make a comeback Clearly, it has been a long haul. To start with, in December 1998 once the Tayals wrested the management control of the Bank, it deposited Rs 20 crore in an escrow account and in a meeting of the board of directors in December 1998, P K Tayal was elected chairman of the bank.
Slowly, Mr Tayal says that old customers began returning to the bank and soon thereafter the management announced that it would be going in for a rights issue of Rs 67 crore.
The bank made a profit of Rs 12 crore by March 1999, that rose to Rs 26 crore in the next fiscal. The rights issue, finally underway in November 1999, was oversubscribed.
By March 2002, Mr Tayal says all the old losses have been wiped off and the bank’s net worth stood at a healthy Rs 250 crore. At another level, deposits stood at Rs 4,500 crore and the CAR at 14 per cent, up from 10.57 per cent in the year ended March 2001. The management also roped in consultants KPMG and Infosys to help out with restructuring its work model and put it into the online mode.
Today, BoR has 355 branches, all of them wholly computerised. With the help of Infosys, it has put 50 of them on the online network. These branches account for 70 per cent of the business —which is now being conduced online, he added. The cost of funds has been rationalised as well, and deposits now attract about 7.5 per cent against an unsustainable 11 per cent earlier.
He also stressed that BoR had among its customers prestigious industrial houses like the Tatas, the Bajaj group and the Birlas.
The roadmap drawn up by KPMG envisages that over the next three years, the bank should aim at achieving a net worth of Rs 500 crore, deposits of Rs 10,000 crore, a Rs 250-crore profit with a profit of Rs 100 crore in the near future, and 520 branches.
All the branches would be interlinked, offering customers country-wide connectivity. It is even eyeing the possibility of declaring a dividend by the end of March 2003.
Mr Tayal believes that the shares of the bank would see a good growth. For, since going online, its per employee business has been growing rapidly because the electronic fund transfer system gives value for money to clients who have dealings in different centres and need spot crediting and debiting facilities.
It is also tapping in a big way retail and small enterprises, and attracting more current deposits, is active in the gilts market, and plans credit, debit and smart cards as well.
Also, the bank is neither shedding staff by offering the voluntary retirement scheme, nor is it undertaking heavy recruitment.
Significantly, the bank has seen no NPA in the last three years, Mr Tayal pointed out, even as a recovery drive continues to for the cumulative NPAs.