Murali Ramakrishhan, who used to be with ICICI Bank as a Senior General Manager was taken as MD & CEO by the Board in October 2020 to turn around around the 93-year-based South Indian banks.
In an interview with Toi, Ramakrishhan talked about his plan.
You join a bank in the middle of a pandemic.
Is there a specific mandate for you as a CEO? More discussions on how I see the bank and how it can be run differently and solutions for various problems.
SIB is the largest among small banks and has branch-centric structures such as public sector banks.
It is a great experience to articulate how you want to restructure all banks in terms of assets and accountability and put into various things so that they come together as a strong foundation.
To what extent the restructuring has been completed? I would say that it’s almost finished now.
Previously the branch managers were all firefighters occurred in the branch and they did not have much time for business.
At present the role is divided between branch managers who take care of businesses and go after customers and operational managers who are responsible for operations.
Branch distribution structures mainly focus on deposits and several businesses run through branches such as agri and gold loans.
We have a separate vertical business with a clear focus on what they need to convey and focus them not only credit but how many crosses they can do.
In addition, I bring the Data Science Division for Analytics on a 68 lakh customer base so we can direct the existing book to produce an offer that has been previously approved.
We have head marketing and head of major credit and we have eliminated it.
Experts say that the system the system needs to undergo a reshuffle for the digital world for the past four years, this bank has invested RS 150-RS 180 Crores in technology.
We have gone for a new retail platform from nucleus.
We will also look for new SME platforms for onboarding all SME customers.
We have a new system for collection management, treasury, and customer relationship management.
There is a clear strategy of articulation for cloud adoption that we have brought to our council., The two main problems are that there should be no compromise in customer confidentiality and there should be no susceptibility to outside attacks.
One problem with the bank is the quality of assets.
How was it handled? To improve the quality of assets, we have fully changed collections and recovery.
For retail loans, we have entered outsourcing as being carried out by large banks.
For SME customers and corporate, recovery is being carried out by employees.
At FY22 we have around Rs 850 Crore upgrades and recovery until December 2021.
We expect Rs 1200 Crore upgrades in March 2022.
We have also sold loans to asset reconstruction companies and I monitor special mention accounts every week.
My goal is to first bring non-performance assets net to less than 2% and then below 1%.
We have current surplus funds that allow us to throw AAA and AA companies for short-term loans.
Given your growth plan, how fast do you need to increase capital? I am not desperately looking for capital due to bank capital adequacy of around 15.7%.
Unless we see the market providing a great opportunity to advance continues to increase, then maybe we will go more capital.
I have received approval from the council to increase around RS 2000 crores equity.
And as a first step, I saw raising around Rs 500 Crore.
But I will be right because today given the fact that a lot of short-term money goes to IPO, our story must be a little more convincing for people to take medium-term prospects.
So I will go and target institutional investors who have medium-term horizons.
I will be happy to do that in the next three to six months.