Mumbai: Public Sector Banks have emerged stronger after thanks to a pandemic for consolidation clean and who preceded it.
In an interview with TOI, Rajkan Rai, MD & CEO, Union Bank of India, one of the four banks born from PSB’s consolidation spoke about the year passed and what was in front.
How about 2021 for banks? It starts with a positive signal and ends on FY21 with a better balance sheet.
In April and May, we saw a disorder because of the second wave.
It was very brutal, we lost a lot of valuable lives, but our people went out to work and tried hard to carry normally.
We also have to give it to people from the country and resilience with the economy up again after June.
Whether it is the quality of assets, stress levels or gathering efficiency, the bank is in a better position than pre-covid.
But what happened in the first and second quarters resulted in the slippages reflected in the first results and second quarter.
What are the lessons for the economy that can be used for the third wave? The complete lock in the first wave is disrupted by the economy.
What was needed at that time and most countries followed this principle.
Lockdown in the second wave is more specific location.
So economic disorders, supply chains and localized production.
Which helps to get back up quickly.
I don’t think we will go for a big kuncian now as people have learned to take precautions.
Many experts in this field say that inpatient is less under Omicron but we don’t know and we have to take precautions.
I think we must follow all practices adopted during the second wave – digitizing transactions, reducing personal contacts and avoiding major events.
To what extent do you have successfully finished post-merging limiting your Samarth plan? We managed to complete technology integration in ten months due to planning.
Today we double the size of the former Union Bank and four times the size of the Corporation or Canara Bank.
We have a market share of more than 5% of branches in 15 states and in 22 our business market share is more than 5% in business volume.
We are now planning for Samarth 2.0 who take banks to the next level in digitalization, both in terms of technology and Tech Savvy’s human resources.
We have created a separate digitization department, HR consultant is involved and recruited specialists.
What about the bank association and subsidiary companies first? We are in the process of divestment of our shares in the first Indian life insurance because we cannot have shares in more than one life insurance company.
We also sell our shares in ASREC (asset company reconstruction).
We have changed the name CorpBank Securities as a UBI service and has been developed as a marketing machine.
Today 40% of our retail business is produced by our vertical 1000-strong marketing.
We plan to imitate this success in sweet potato services.
Banks that are consolidated have lost market share.
What is the last advanced ambition of four-five years, the public sector bank loses a market share because they are on the consolidation pathway -? Correcting the balance sheet, recognizing bad credit, procurement and increasing capital and then there is a merger.
Now, we need to focus first to maintain the market share that we have to grow in line with the industry.
I hope that at the end of our FY22 will grow in line with the industry.
Next year and so on we need to grow faster than the industry and this digitization process is in line.
We’ve been at competitive prices, only technology and products that make a difference.
After we have customers who have no reason to go somewhere else.
In March we will launch our financial module full of trade that provides full control efforts from their offices.
Is there an efficiency that has come for a good time during transaction pandemics? Digital has gone up.
At present we have personal loans and mudra loans that end to the end of the extension even digital MSME loans can be done end-to-end online.
I think in the next 9 to 12 months at least 25% of personal loans can be done through the system without coming to the bank for documentation.
Technology orientation here to stay with Fintech brings a revolution.
Fintechs that identify pain points for customers and offer products there.
For me, this is the opportunity to collaborate because they have built technology and are quite agile.
At the same time, they don’t have the support of the balance sheet we do.