interview | padmaja chunduru Business

Amalgamation sans hitch is our goal, says Indian Bank MD

Padmaja Chunduru. File   | Photo Credit: Bijoy Ghosh

With barely six weeks left for the amalgamation of Allahabad Bank with Indian Bank, officials of both lenders are burning the midnight oil to ensure smooth transition of technology and human resources, says Indian Bank MD and CEO, Padmaja Chunduru. Edited excerpts from the interview:

What is your immediate focus as the deadline nears?

Our intention is to see that minimum services are made available to banking customers on the legal day one (April 1) without any hitch.

We don’t want to disturb people on day one when they walk into Indian Bank or erstwhile Allahabad Bank branches. We will try to keep the known faces at branch levels to deal with retail or MSME customers, as personal connectivity is important. So, there will not be any transfers on day one.

We will give a tool kit to branch managers and staff with a clear [message] of what is expected of them when customers walk in. The only rule is that no customer should be turned away.

Will transition be smooth?

Since both banks operate on the same core banking solution of TCS, we don’t see a problem. We have worked with TCS and are confident that operations from day one would be seamless.

We had carried out the amalgamation of our Pallavan Grama Bank with IOB-sponsored Pandyan Grama Bank into a single regional rural bank (RRB) in record time. When we can do it for an RRB, why not for Indian Bank?

What are the challenges in the amalgamation?

We are primarily strong in the south as is Allahabad Bank in the north. There is very little overlap of branches. We flew down zonal branch heads from Kolkata to Chennai and they had a healthy discussion. In fact, we held town hall meetings in three cities and one more will be held soon. Our staff is very receptive. Daily, we get hundreds of suggestions to improve the bank’s performance. Recently, we opened a portal for our staff. Soon, we will do it for our customers as well on the Net.

Is it not time to rationalise products?

Yes, it is a good opportunity to rationalise and remove products that have been going on for a long time. Sun-setting products is a good opportunity. The other one is to pick the best products from the two and tweak them into more market-friendly products. In our next steering meeting, we will realign retail assets.

We will centralise loan processing, Retail, MSME, Agriculture (RAM) allied activities so that branches are not bogged down in processes. That will help us have staff on the customer-facing side.

Do you think that the merger will lead to excess staff?

We don’t have excess staff, but some duplication of roles. There will be some merger of zonal offices, administrative offices, inspection departments and training offices.

How are you planning to address overlap of branches?

There is very little overlap. We have a third of our branches in the South or even more and they have a third of the branches in U.P. We have hardly 100 branches in U.P. against Allahabad Bank’s 1,100 branches. We will find ways to merge them. Branches in distinct places will continue. Both of us have a zonal office each in Lucknow and Kanpur. They will be merged. Wherever we can cut cost, we will do it.

Going forward, what will be the focus area... retail or the corporate sector?

Today, we have 60% focus on RAM and 40% on corporate while it is the reverse for Allahabad Bank. After the amalgamation, it will come down to 50:50. We need a good mix. It cannot be only retail or only corporate.

Recently, you had visited corporates. Any feedback from them?

I have been doing this since my SBI days. There are so many good companies in India in which Indian Bank is not there. In Chennai, there are corporates who have not been availing any working capital facility from us. We are trying to rope them in.

What is your message to your staff?

March 31 is the last day for both as distinct entities as the legacy is ending. Both will present financial result as standalone entities. Hence, I am asking them to work together and bring out the best results. Let’s start the new entity from a position of strength. June 2020 will be our first combined balance sheet with no loss or provision. Some legacy issues will be running for one or one-and-a-half years after the amalgamation.

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Printable version | Apr 18, 2021 12:24:36 AM |

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