K. Cherian Varghese, Chairman and Managing Director of Corporation Bank, believes that information technology has helped the bank take care of a large volume of transactions. In the near future all transactions in the bank will be supported by IT, he told Ravi Sharma in an interview.Excerpts:
Who benefits most from the new banking regime? What strategy have you planned?
The customer. He has many banks to go to and can choose from myriad operations. With margins under pressure, banks have to improve efficiency, bring down transaction costs and increase their business volumes.
Has Corporation Bank's investment in computerisation helped?
Yes, it has allowed us to take a larger share of business. Without IT we could not have taken care of the large volume of transactions, especially of smaller values. It has also helped improve internal book-keeping and we can do business with outsiders. IT has opened new delivery channels. We have the second largest ATM network among public sector banks. Internet banking is another spin-off of our investment in IT - 390 of our branches have Internet banking facilities.What are your areas of focus?
The home loan sector is one. There is still a high, unsatisfied demand for housing loans. We grew by 120 per cent in this sector last year. We are also focussing on offering value-added products, such as Corp junior account (where money can be easily transferred from one account to another in the same branch).
What has been your experience in the insurance sector?
We have introduced two initiatives (Corp Jeevan Raksha and Corp Griha Raksha) in partnership with the Life Insurance Corporation (LIC). Both are doing well. Last year we did Rs.75 crores worth of business, earning Rs.1 crore as fee. Corp Jeevan Raksha is a general insurance policy in which by paying a small premium one automatically gets an insurance cover of Rs.1 lakh, going up to Rs.2 lakhs in case of death by accident. No health check is necessary. The Jeevan Griha Raksha policy entails taking insurance cover against your housing loan. In the event of the death of the borrower the (mortgaged) property will be easily freed. We have also entered into an understanding with the New India Assurance Company to sell their policies.Any other tie-ups?
We have tied up with the Oriental Bank of Commerce, Andhra Bank, Karnataka Bank, Dena Bank and Bank of Rajasthan for the use of our 511 ATMs by their customers. Each transaction earns us a fee.
Corporation Bank does not have a big savings bank base. Why?
Out ATMs will set that right. We are now in a better position to go to the people. We have the delivery channel. In fact, during the last financial year our savings bank deposits grew by 25 per cent, whereas our total deposits only grew by 14.8 per cent.
Corporation Bank was one of the last banks to offer a voluntary retirement scheme package.
Yes. We did not want to go about offering VRS arbitrarily. We made a manpower study and only then identified 163 personnel, who were eligible for VRS. As many as 200 personnel sought VRS, but only 163 were allowed to opt for it.