What makes Saraswat Bank click!

What makes Saraswat Bank click when large PSU Banks are in trouble? The answer lies in the fact the UCB has restrained its temptations of advancing loans to big corporate. It would like to restrict itself by lending mostly to small businesses and has in fact added more than a 1000 new accounts with loan needs of Rs 1 crore to Rs 10 crore, revealed the leading UCB’s Chairman Gautam Thakur in an interview given to the daily DNA.

It serves dual purpose- of serving cooperative ideals by supporting small businesses whom large banks would not touch with a barge pole as well as widening the customer base, says Thakur. “But we are careful and choose businesses which are worthwhile and has the potential to grow, he added.

“It is not though that we do not have NPAs but that it was a legacy from the past. As of now, we are not into funding big businesses with loan size of Rs 100 or Rs 200 crores. Saraswat Bank has about Rs 1,000 crore of advances out of the total advances of Rs. 21,500 crore which is troubling it”, stressed Thakur.

Most of our 1.88 lakh shareholders are our borrowers as well. Our board members include chartered accountants, bankers and lawyers who give a multi-dimensional view to all decisions of the bank. Any borrower can meet the chairman of Saraswat Bank, claimed Thakur.

“Twelve weak co-operative banks were merged with Saraswat, thus, saving the money of over a million depositors in these banks. We were the first co-operative bank that got a pan-India license to open branches wherever we wanted. But, our decisions are always based on the consensus in the board. We keep external influences at bay in our decision making” Thakur stated.

The bank has a total advance of Rs 21,500 crore and Rs 33,700 crore in the deposits. About 65% of our advances are on the corporate side which will be brought down to less than 50% in the next three years, asserted Thakur.

Another reason for its success is that Saraswat Bank has kept SBI as a benchmark and tunes its rates of interest with the biggest lender in the country. It feels proud calling itself the SBI of the co-operative banking sector.

Another crucial strategy for opening new branches of Saraswat Bank is via centres of business correspondents to cut cost and remain afloat. It would open new braches only when there is good response from these centres, revealed the Chairman.