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Published on: Jan. 25, 2021, 12:41 a.m.
SVC's aggression is mixed with caution
  • SVC: in the business of managing risks; Photo: Sanjay Borade

By Lancelot Joseph. Executive Editor, Business India

“The last 18 months have been progressive for us,” explains Ajit E Venugopalan, 57, managing director, SVC Bank. “We have begun offering state-of-the-art facilities such as net banking self-registration, which enables account holders to register and activate the net banking facility online, with just their registered mobile numbers and registered e-mail ID.” Venugopalan, a chartered accountant by profession, was elevated to the present position in October 2017, after having put in almost 31 years in the bank. He had joined the bank as a probationary officer way back in 1989. “SVC had many Mumbai-based companies doing business with it,” he reminisces. 

SVC Co-operative Bank (earlier known as The Shamrao Vithal Co-operative Bank Ltd) was founded when co-operation was just beginning to gain ground in the country. It was set up with the primary objective of assisting the less fortunate members of the community in their economic enterprises, to encourage savings and to create funds for providing financial aid to deserving members. The bank was originally registered as a Co-operative Credit Society in December 1906.

Today, the bank is one of the oldest and most recognised names in the country’s co-operative banking space and remains the country’s only multi-state scheduled bank, with a presence across 11 states – Maharashtra, Karnataka, Goa, Gujarat, Rajasthan, Delhi, Haryana, Madhya Pradesh, Andhra Pradesh, Telangana, Tamil Nadu.

In the 1980s, the bank had decided to employ chartered accountants, along with experts in technologies and law, for the first time. “But at that stage, the bank’s size was about Rs200 crore (deposits and credit put together), as against the Rs28,000 crore level we are at now,” adds Venugopalan. “And, when the management decided to take in one engineer and one legal expert from outside, along with four chartered accountants in various verticals – two in credit, one in audit, and one in accounts, I was lucky to have been chosen in credit.” He had previously worked with AF Ferguson & Co. 

Set up in 1906, SVC Bank has contributed significantly to the development of the co-operative movement in India for over a century. Headquartered in Mumbai, it is a bank firmly on the growth curve, clocking 7.64 per cent growth in total deposits and 11.43 per cent growth in total advances (2018-19). With total businesses worth Rs28,108 crore and a net profit of Rs142 crore (in 2019-20), it has proven its robust fundamentals.

With the bank’s gross NPA seeing a decline by 0.09 per cent to 3.50 per cent in 2018-19, it has gone on to offer an entire gamut of services across retail banking, corporate banking and international banking to its varied clientele. Today, the bank has a vast spread of 198 branches, 211 ATMs and an employee strength of over 2,500. In 2019-20, gross NPA levels continued to be at 3.74 per cent lower than the levels of the banking industry in the period. 

In 2005-06, SVC’s tally of branches amounted to 38. “Subsequently, we acquired three more banks – Saptashrungi Co-operative Bank in Nashik, Mahaveer Co-operative Bank in Kolhapur and Bangalore Central Co-operative Bank in Bengaluru and Apna Co-Op Urban Bank, Hyderabad,” says Venugopalan. “Some of the branches which, we felt, would be superfluous were closed down or shifted to other locations. And, from then on, we started getting licences regularly from the authorities – finally bringing us to where we are today, with 198 branches.”

Digital innovation

SVC Bank’s digital innovation was the launching of the term/recurring deposit programme, wherein customers could place term and recurring deposits online from the comfort of their home. Customers can now also submit their 15G/15H forms online through net banking, to ensure that TDS is not deducted on their interest income, if all applicable conditions are met. SVC has also introduced ‘SVC Rewards’, a platform that enables customers to earn points on their digital transactions, which can later be redeemed against products and services – as e-vouchers – from within a predefined catalogue on the platform.

“Over the past few months, we have also been focussing on creating advanced services, to revolutionise the way our customers bank on a daily basis. Some of the major initiatives that are in the pipeline for us are: core banking transformation; enhancement of internet banking features; revamp of mobile banking platform; enhancement of IMPS & UPI platforms to WhatsApp banking, et al,” says Venugopalan. The bank also offers its own indigenously developed core banking system ‘Genius’ to other co-operative banks for highly secure banking operations.

“Our IT professionals play a pivotal role in fuelling SVC Bank’s quest for constant adaptation to the fast-changing landscape of technology, making it more customer-centric, and bringing in value addition,” says Santosh Mohile, head, IT, whose large team of 90 people constantly strives to offer futuristic technology while also simultaneously keeping up-to-date with the cutting-edge modernisations in the industry.

In terms of digital transformation, SVC has built an entire suite of digital payments: UPI, debit card, mobile banking and net banking. “Using digital tools, we are empowering customers to do conventional banking from the comfort of their homes,” adds Mohile. “Using data analytics, we identify opportunities for cross-sell and up-sell and offer tailored solutions as per customer profile and life stage. Further, digital means are being adopted for generating leads and conversions.”

After taking over at the top, Venugopalan inducted a few laterals from other banks. “SVC Bank is an inspiration,” affirms Hemant M Komre, head, legal & recovery, SVC. “It is an organisation which reinforces trust, faith and confidence in its employees, inculcating and developing the ‘to do’ and ‘go get it’ attitude. This liberty to showcase ability and learning has been exhilarating.”

“SVC has a wide range of products and services, comparable with the best in the banking industry,” contends Vasant Srivastava, head, retail banking. “It has embarked on a journey of digital transformation which, combined with strong relationship management, a committed workforce, and robust processes, make it well-positioned to grow fast and achieve greater heights.”

“SVC has a legacy of strong ethics, corporate governance, freedom to take decisions and mixing of the highest level of professionalism with family-like bonding – both with customers and among staff,” observes Ravinder Singh, head, corporate banking. “No surprise then that we see a majority of corporate customers banking with us for generations and most of our employees giving their best till superannuation.”

A bouquet of products

The bank has added an array of product offerings targeted at specific segments. While it has been a strong player in commercial and corporate banking over the past decades, it has also partnered with many small and medium companies in their growth journey over the years. 

“We have brought in fresh products to cater to segments like chemists & pharma distributors, as also professionals like lawyers, architects, chartered accountants, etc,” says Venugopalan. “They include SVC Mediquip, SVC Chemists and SVC Professional ODAP, which are designed to meet the unique funding needs of these segments at competitive pricing levels.” The bouquet of products and offerings have been expanded to service retail customers and they include offering home loans, loans against property, auto loans, gold loans, and small working capital loans, amongst others.

“In banking, operational efficiency is a key differentiator,” explains Venugopalan. “Operational efficiency results in faster response time and turnaround times (TATs), lower cost of operations through streamlining of processes, including digitising processes and bettering the customer experience.” Such a unique model controls decentralisation, enabling the bank to be nimble-footed, as the branch staff is empowered for quick decision-making resulting in faster TATs.

SVC Bank’s branches source and service both corporate and retail banking customers and their strong relationship across customer segments helps them grow relationships by offering retail products to the corporate segment (like car loans, commercial vehicle loans, equipment loans, etc) and to their staff (salary accounts and all retail loan products), suppliers and distributors, to meet all their banking requirements. “The initiatives on digitisation have helped streamline processes and improve efficiency, resulting in better customer experience,” observes the MD.

“With a personalised banking experience unparalleled by any other bank, SVC’s officers, be they junior or senior, are always just a phone call away,” says Rajesh Sanghvi of Delta Nutritives Pvt Ltd. “When in need, the officers always come up with a solution. Its banking systems are user-friendly, thus leading to a seamless experience.” Sanghvi has been associated with SVC since 2010. “The bank has held our hand at each juncture and has been a partner and advisor throughout our journey. Our turnover has increased several times, which would not have been possible without their help.”

“In 2004, when we executed a major printing order, we received great support from SVC,” discloses Ramamurthy Shenoy R of Gemini Graphics Pvt Ltd, which has been associated with SVC Bank since 2002. “We got the DD within one hour, after showing the order for printing.  This type of support by SVC is unforgettable. SVC Bank’s association has given us the strength to grow, helping us achieve a turnover of Rs12 crore in 2002 and over Rs100 crore today.”

“After leaving the army, we had approached the SVC Bank with a small proposal for a term loan of Rs4 lakh in 1989,” reminisces Rahul Nigam, proprietor, Macks Surface Treatments. “From there on, for the next 30 years, SVC has been with us and, today, we have crossed Rs100 crore turnover, doing job work as ancillary in surface treatments. It’s not only about granting facility; we got their support at the right time and in the right spirit.”

“We shifted our banking account from a nationalised bank to SVC in 2011,” acknowledges Satish Netalkar of the Netalkar group of industries. “The bank has supported all our expansion projects since then and has sanctioned us credit limits of nearly five times the limit sanctioned by any nationalised bank.I would say, SVC Bank understands the specific needs of the industry better and that their credit delivery is prompt which helps and creates confidence in the customer to undertake business expansions. Also, the SVC Bank team is knowledgeable and has always been dynamic.”

“We are aggressive, but with a touch of caution,” spells out Venugopalan. “When we take a call, we go ahead and ensure that the project is executed well. But, at the same time, if at any stage, while taking decisions, we find a risk element that we had missed out at the onset, then we stop. The bank does not endorse any unnecessary or adventurous risk because taking adventurous risks really does not help the bank. It may help it grow in numbers in a short spell but will impact the organisation over a longer period of time. It takes long to accumulate capital. And, we do not have any right to play with someone else’s money, without looking at and studying the pros and cons of an investment. Even large corporates are dependent on SMEs nowadays. Their ways of doing business have changed. So, this sector is here to stay and the government is also putting a lot of thrust in this area. Take for example the real estate sector. Direct finance to builders gives attractive yields, with the rate of interest going as high as 16-18 per cent. Despite such lure, over the last so many years, the bank had a policy that we will not take adventurous risks, just because it might look extraordinarily lucrative.”

As a bank, SVC is in the business of managing risks and “our robust risk management practices and processes have enabled us to keep credit costs low and gross NPAs below four per cent through the last five to six years– lower than the levels of the banking industry in this period,” observes Venugopalan.

Venugopalan wants to ensure that the risk is widely spread. During the last three years, he has changed the bank’s focus to retail. Basically an MSME-centric bank, SVC continues to have a great amount of focus and thrust on that segment. “But we are also looking at retail lending, which all the private sector banks are currently on, as a way forward to taking the bank ahead to double the business from the existing level in the next 5 years.”

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