Embrace change to keep banking sector afloat

Stating that he is encouraged by the bank’s performance, Shyam Srinivasan, the MD and CEO of Federal Bank, told DTNext recently that Tamil Nadu constituted a very important segment of the bank’s customer base. With as many as 150 branches, the state has the highest number of outlets of the bank, outside of Kerala where the bank is headquartered. 

The bank’s performance on various sectors had resulted in it showing a growth of 19 per cent as compared to the normal 4 per cent growth of other banks. What seemed to have helped Federal Bank was the ‘differentiating service’ it offered, that prompted customers of nationalised banks, to make an informed decision to switch over. Srinivasan tells us, “Our bank was not seeking more branches. Instead it sought more customers.” These customers would in turn, prove critical to the bank putting forth its various initiatives. 

A strategy adopted by the bank was to ensure that the branch managers, instead of waiting for customers to come to them, now spend more time visiting customers at their end. In this connection, the bank recently appointed 25 Relationship Managers as well. “Branch managers knowing their customers well and understanding their problems had resulted in the bank’s NPA (non-performing assets) being as low as 2.92 per cent,” Srinivasan said. 

“While this figure was as high as 12 per cent in some nationalised banks, the lowest was 1 per cent. The NPAs included a mixed bag of education and corporate loans, the latter being slightly higher,” Srinivasan adds. 

With banks becoming smaller in size, ensuring better and improved facilities for customers is necessary to ensure continued success in the industry. Keeping with the times, the bank has embraced the notion of making things faster and simpler, with a little help from technology. Srinivasan explains, “We have introduced a new smartphone app called Lotza, which is a Unified Payment Interface. Through this, customers from any bank can transfer money to an individual holding an account in any other bank using just a unique app number and not the account number.” He remarks that the app had already been downloaded by two lakh customers of other banks while 20,000 Federal Bank customers have also done the same.