In an exclusive interview Dr Mukund Abhyankar, Group Chairman of the Cosmos Co-op Bank, Pune says the off-take of loans has been reduced to a lowest point of last 2-3 years as the entire staff of the Bank has to be devoted for demonetization actions only.
Excerpts:
Indian Cooperative: What problems are you facing in doing business in the wake of demonetization?
Mukund Abhyankar: The total economy of the country being sluggish since last two years, the demand for loans was already at a very low point. Now with the introduction of demonetization on 8th November, 2016, the entire staff of the Bank has to be devoted for demonetization actions only. Therefore, the off-take of loans has been reduced to a lowest point of last 2-3 years.
Moreover, the spurt in deposits due to return of SBN currency has put on Banks additional burden of interest. Unless the income of Bank increases through additional loaning, the interest burden on deposits can be harmful.
Indian Cooperative: What strategy have you employed to beat the situation?
Mukund Abhyankar: When the off-take of loans has slowed down, we have concentrated more on our treasury operations and especially dealing in government securities. This has resulted in partly recoupment of loss of profit due to non-loaning. But now the security market is also in low ebb.
Also, we are trying to concentrate more on retail loans to boost the loans portfolio.
Indian Cooperative: Has Cosmos Bank perhaps opened new bank accounts, registered people for mobile banking app, issued RuPay debit cards, installed POS machines and launched awareness programmes? Can we have some details?
Mukund Abhyankar: Yes, we have definitely opened many new bank accounts, installed as many POS machines available from manufacturers and launched awareness programmes for cashless banking. Here we, in Cosmos Bank, firmly believe in the ideology of our Hon’ble Prime Minister Shri. Narendra Modi and we are sparing no efforts in educating and motivating our customers to go for cashless banking. We have upgraded our hardware in IT Department to go more for IMPS i.e. mobile banking in our internet banking, etc. Moreover, our Bank is now prepared and well equipped for joining in the group of UPI technology.
Indian Cooperative: What else are you planning in days to come?
Mukund Abhyankar: Cosmos Bank is looking forward in appointment of more Institutional Business Correspondents like rationing shop owners, etc (as being thought by Government of Maharashtra). Besides, by appointing Business Correspondents in large number and resorting to technology upgradation like tablet banking, Cosmos is looking ahead for increased branchless banking. This will also achieve the Financial Inclusion objective of our Prime Minister.
Indian Cooperative: Are you also helping smaller UCBs in their cash woes?
Mukund Abhyankar: Cosmos Bank is certainly helping the smaller UCBs in a positive way in their cash woes. Here, Cosmos is the ONLY UCB in the country having RBI Currency Chest. Though we are not receiving enough cash from RBI, still we are trying to have a balanced treatment in helping the smaller UCBs by supplying them cash from our Currency Chest and simultaneously catering to our own customers through our 140 branches. During last 45 days, we have catered to 36 smaller UCBs by providing them about Rs.25 crore of cash. Even on one or two occasions, we have supplied cash to large UCBs i.e. Saraswat Co-op. Bank, SVC Bank for their branches in Pune.
Even the Pune District Association of UCBs, which has about 50 member UCBs, have represented to RBI that Cosmos Bank’s Currency Chest be recognized as the ‘Receiving Point’ for these banks’ currency needs. Cosmos Bank has given consent to it and also represented to RBI to supply at least Rs 80 to 100 crore solely for supplying to these smaller UCBs.
Indian Cooperative: Are you happy with the RBI notification?
Mukund Abhyankar: We are following the directives from RBI and Govt of India in toto. There is not a single violation or discrepancy in cash management after 8th November 2016 till today. The cash handling reports are regularly submitted to RBI before 10.00 pm everyday as directed by RBI.