The Hindu Business Line : Banks fine-tune retail focus

AS PART of their focus on retail loans, several public sector banks are segregating their retail operations to speed up processing and disbursement of retail advances.

This helps control turnaround time for retail loans and make optimum use of staff. The dedicated approach has helped increase the retail business, said bankers.

Union Bank of India has 33 retail marts all over India, covering 29 centres. Of these,29 marts were opened at one go in September and they did a cumulative business of Rs 220 crore on the opening day, said Mr V.S.R. Murthy, General Manager, Retail Banking Department. In the second phase, the bank plans to open 20 more retail marts, covering 15 additional centres.

These marts are within the branch and have separate officials in charge of each retail product, such as housing loan, personal loan, trade and educational loan.

"Though the marts are part of the branch, they are independent. Due to core banking solution, it is also possible to have separate balance sheets," said Mr Murthy.

Bank of Baroda too has adopted a similar approach to retail operations with the launch of Baroda Moneyplex. The bank has 62 Moneyplexes and the number is likely to cross 100 by March 2006. About 60-70 per cent of the retail business comes in through these Moneyplexes, said a senior official of the bank.

"The staff of Moneyplex have a separate identity and are specially trained. They also have discretionary lending power, so that there is no delay in disposing cases," the official said.

Bank of India has adopted a `hub and spoke' model in Mumbai and Ahmedabad. The plan is to have 10 hubs by March 2006, said a bank official. As the hubs process and sanction loans and collect post-dated cheques for repayment, customers need to go to branches. The hubs were introduced in July and since then the bank has done additional retail business of Rs 30 crore, the official said.

As part of its business process restructuring, State Bank of India set up centralised processing cells for various functions. These cells co-ordinate with branches for back-office functions.

For instance, one centralised processing cell takes care of processing of retail loans. The cell for liabilities takes care of account opening, while the clearing cell clears the operations of all branches.

Mr A. Ramesh Kumar, General Manager, State Bank of India, said, "This model frees the bank branch to concentrate on marketing and sales, thereby converting it into a sales hub." SBI has started this model in Mumbai and will soon extend it to other centres, he said.

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