South Indian Bank (SIB) Launches "Paperless Flow" Of The Corporate Loan Sanctioning Process For The First Time In The Banking Industry in India
The 'Credit Automation Project' of South Indian Bank ,which is expected to improve the Bank's efficiency in credit processing and sanctioning of corporate loans , was today inaugurated by Dr.V.A.Joseph , MD&CEO of the Bank in the presence of Mr B Suresh Kamath, MD of LaserSoft Infosystems and Mr.M.Valsan ,Executive Director of the Bank.
TweetThe 'Credit Automation Project' of South Indian Bank ,which is expected to improve the Bank's efficiency in credit processing and sanctioning of corporate loans , was today inaugurated by Dr.V.A.Joseph , MD&CEO of the Bank in the presence of Mr B Suresh Kamath, MD of LaserSoft Infosystems and Mr.M.Valsan ,Executive Director of the Bank. LaserSoft Infosystems has provided the software for the implementation of this project. This 'paperless flow" of the loan sanctioning is a unique process and is being introduced for the first time in the banking industry .
“The South Indian Bank which has got a strong focus on technology and service delivery will be able ,in future ,to expedite scrutiny of the loan application ,appraisal and assessment of the limits with the help of ‘Loanflo’,the corporate loan solution software .This will change the way SIB as a lender has been doing business , as it will allow automation of the entire loan processing , sanctioning and tracking system for corporate loans”,Dr.Joseph stated inaugurating the project.
Mr.M.Valsan ,Executive Director of the Bank in his address explained that the new software will help in evolving a “paperless flow” of the loan sanctioning process and will also expedite sanctioning of corporate loans. “It is a unique process and is being introduced for the first time in the banking industry in India”,Mr.Valsan added.
Mr B.Suresh Kamath MD of LaserSoft Infosystems in his speech acknowledged the support received from the South Indian Bank by way of banking inputs for the development of the unique corporate loan solution software,”Loanflo” .
Mr.Cheryan Varkey ,Chief General Manager and Mr.P.M.Siby ,Chief Manager of the Bank also spoke on the occasion. Executive Directors - Mr.H.Suresh Prabhu and Mr.Abraham Thariyan and other top executives of the Bank also attended the function.
Notes to Editor
THE SOUTH INDIAN BANK LTD :-
A CORPORATE PROFILE
South Indian Bank (SIB) is one of the leading scheduled commercial banks in India with a strong focus on technology and service delivery.
One of the earliest banksin South India, "South Indian Bank" came into being during the Swadeshi movement. The establishment of the bank was the fulfillment of the dreams of a group of 44 enterprising young men who joined together at Thrissur, a major town (now known as the Cultural Capital of Kerala), in the erstwhile State of Cochin to provide for the people a safe, efficient and service oriented repository of savings of the community on one hand and to free the business community from the clutches of greedy money lenders on the other by providing need based credit at reasonable rates of interest.
Translating the vision of the founding fathers as its corporate mission, the bank has during itslong sojourn been able to project itself as a vibrant, fast growing, service oriented and trend setting financial intermediary.
A Host of Many Firsts
SIB has many firsts to its credit .
SIB is –
*The first in the private sector in India to open an NRI branch .
*The first private sector bank to start an Industrial Finance branch in India.
*The first Indian traditional Bank to achieve all branch/office inter-connectivity and register 100% CBS .
*The first private sector bank from India to provide management support to an Exchange House in the Middle
East .
Business Overview
South Indian Bank(SIB) has recorded its highest ever net profit, in its 80 year history , of Rs 194.75 Crores in 2008-09 registering an increase of 28.44 % over the last year’s Rs 151.62 Crore.The Bank’s aggregate business surpassed Rs 30237 crore as on March 2009 comprising deposits worth Rs 18092 crore and advances worth Rs 12145 crore.
“This performance reported by the bank is encouraging and it demonstrates our continuing commitment to delivering sustainable results” ,stated Dr.V.A. Joseph MD & CEO of the Bank ,adding,” the fact that we were able to post a net profit of Rs 194.75 for the past fiscal is extremely welcome news in this environment especially as we had targeted only a net profit of Rs 190 Crore.”
The highest ever dividend @ 30% in the 80 year history of the Bank has been recommended as proposed for the previous fiscal (and paid).
Enhancing value for the shareholders, the Bank’s Earnings Per Share (EPS) on annualized basis improved from Rs.15.02 as at March 2008 to Rs.17.23 as at March 2009.
Net Interest Margin registered an improvement from 2.62% as at March 2008 to 2.92 % of the corresponding period of this fiscal. The NIM has improved due to the shift in CASA.
Return on Average Assets for the fiscal increased to 1.09 % compared to 1.01 % for the same period a year ago. Capital to Risk Weighted Assets Ratio as at March 2009 now works out to 13.89 % vis-à-vis the regulatory minimum of 9%.As per Basle 11 standards ,the CRAR is 14.76 %.
Productivity as at March 2008 measured by Business per Employee rose to Rs 645.14 lacs from Rs.600.43 lacs a year ago. Also Profit per Employee increased to Rs.4.53 lacs from Rs.3.59 lacs for the same period of the previous year.
Company Net Worth
During 2007-08 the Bank had crossed the milestone of Rs.1000 crore in net worth. Capital to Risk Weighted Assets Ratio as at March 2009 now works out to 13.89 % vis-à-vis the regulatory minimum of 9%.As per Basle 11 standards ,the CRAR is 14.76 %.
The major FIIs in the FII holding of 47% in the Bank’s equity include ,India Capital Fund, International Finance Corporation,Acacia Partners LP,India Fund Inc.,Goldman Sachs Investments(Mauritius),Morgan Stanley(Mauritius),India Institutional Fund,Deutsche Securities Mauritius,FID Funds(Mauritius) etc.
The first bonus issue in the Bank's history has been effected in October 2008 by issuing two crore bonus shares in the ratio of 1:4, i.e. one bonus share for every four equity shares held on the record date of 17th October 2008 to reward our shareholders as Bonus issue is intended to enhance the value for our long-term shareholders in the wake of the unprecedented all-round growth of the Bank .
Asset Quality of the Bank
During the global financial crisis when there is public concern about the asset quality of banks , SIB could bag many a honour for its asset quality.
Dun & Bradstreet, the world’s leading provider of business information, knowledge and insight in their ‘Dun & Bradstreet Banking Awards 2009’ has honoured the Bank as the “best bank in asset quality’ in the private sector which includes both the new generation as well as the traditional banks.
SIB also is the bank from the private sector –including the new generation and traditional banks-to emerge as the ‘best bank in the asset quality’ in the “BT-KPMG Survey of Best Banks in India” published on 12th December2008.
The Bank has also been selected as the Best Performer in Asset Quality category among private sector banks which include both the new generation and the traditional banks in India in the “Analyst 2008 Survey of Indian Banks” announced in October 2008.
Similarly the Bank, which has been admired as a “Top NPA Manager” in the previous “ASSOCHAM- ECO PULSE(AEP)” study for having reduced Net NPA substantially within one year could improve it further to the only Bank among the private sector Banks-which includes both the new generation and the traditional banks- to have registered an improvement in net NPAs (by -29.82 percent) in the current Assocham- Eco Pulse (AEP) Study.
Due to effective recovery measures resorted to during the current financial year, Gross NPA Ratio declined to 1.85 % as at December 2008, compared to 2.53% a year ago. As at December 2008, the Bank’s Net NPA Ratio came down further to 0.39% as against 0.49% as at December 2007.
Branch Network
The branch network, as on date, comprises 530 CBS branches , 13 Extension Counters and 280 online ATM Centres .The Bank also proposes to open 30 branches during the next 12 months so that the Bank then would have a CBS branch network of 560 branches .This would expand the SIB footprint to 26 States and union territories in India.
As per the perspective plan, during the 2008-13 period the Bank will open 250 branches , out of which 150 will come up in North India and 100 in the south .The bank is also aiming to open 275 more online ATM Centres during this period.
Technology As The Key Driver of Business
The Bank’s ambitious technology up-gradation project named ‘SIBertech’ by introducing a Centralized Core Banking Solution ‘Finacle’ in technology partnership with the Infosys Technologies Limited has already been completed and all the branches/offices all over the country have been linked to the Centralized Data Centre at Kochi and hence 100 % of the Bank’s business is now absolutely on-line .The Disaster Recovery Facility is functioning at Bangalore.
With the up-gradation of technology , SIB now offers a host of hi-tech products which enables the customers bank from anywhere , saving them time , money and hassles .This means that they can avail of a range of solutions and make convenience banking a way of life . For this the Bank has launched various value-added products and services like Global Debit-cum-ATM card, Internet Banking, Mobile Banking etc.
South Indian Bank’s Global ATM-Cum-Debit Cards are now acceptable in the Master Card International Network System as well as in the domestic National Financial Switch (NFS) Network System owned by IDRBT, the technical arm of RBI. It can be used in 8,30,000 ATMs & 7 million Point Of Sale(POS) terminals worldwide. The Maestro Debit card is a PIN based card and operates similar to ATM making it 100% secure, even in POS terminals.
The Bank very recently could bag a special award for excellence in banking technology from IDRBT which is the technical arm of the Reserve Bank of India. This award was presented to the Bank as a national -level recognition to the excellent contribution made in the area of information systems, security policies and practices .The bank has bagged this award by tightly competing with all categories of banks in India such as foreign Banks, private sector banks, public sector banks and co-operative banks .
Business Strategy
The Bank is committed to become a technology- driven , customer-oriented bank (the new corporate slogan being -“Experience Next Generation Banking”)where passion for excellence is a way of life , innovation is a tradition , commitment to values unshaken and customer loyalty is abiding .
The long-term corporate objective is to emerge as the ‘most preferred Bank in India’, with core competence in fostering relationship banking, garnering core deposit with accent on cost, creating high yielding quality assets through focused marketing, qualitative appraisal and effective monitoring. We are dedicated to provide quality service to our customers and maintain high standards in corporate responsibility.
SIB IS Now A Financial Supermarket
While the bank gives risk- adjusted rate of interest for its deposit products, Mutual Fund products marketed by the bank offer higher returns proportionate to the risk appetite of the clients. The bank has also made available life insurance products to the clients to offer protection to their family and general insurance products to provide pecuniary compensation in case of loss of property.
The bank has tied up with ICICI Prudential life insurance for selling of insurance products at over 284 branches in Kerala. This is a major step towards growing the fee-based income of the bank. This partnership would help, for the first time in the country ,the policyholders of ICICI Prudential to pay their first as well as renewal premia in cash at over 299 branches in Kerala. The Bank has also a tie- up with Bajaj Alliance for distribution of general insurance products.
Recent Developments
South Indian Bank (SIB) has bagged the “Best Asian Banking Web Site” award from Asian Banking & Finance Magazine, Singapore in “Asian Banking & Finance Retail Banking Awards-2008” , competition for its website , “ www.southindianbank.com.”
The Bank had declared 2007-08 as the “Year of Youth” and had launched a novel deposit scheme “YOUTH PLUS” with technology features focusing the younger generation.
The Bank, as part of the global brand building exercise, has signed mega star Padmashree Bharat Mammootty as its Global Brand Ambassador. His tech savvy image goes hand-in-hand with our bank which has always been in the forefront of embracing technology. South Indian Bank has also unveiled a new corporate logo that demonstrates the major transformation the bank has undergone since its inception .
To provide real-time fund transaction for the online banking customers through the online banking channel of the bank ‘southindianbank.com’ , the Bank has launched a Net-Banking initiative. This will make possible for the retail and also corporate customers of the Bank for online debits/credits from/to authorized accounts. This enriched Net-banking product has the potential for utility payments and payment gateway (shopping mall) facilities. This customer- value proposition contains functionalities to support consumer (Retail) e-banking and also corporate e-banking .
Future PlansAs per the perspective plan during the next five years, the employee strength of the bank would go up to 7500 and the bank would have 750 branches and have a business turnover of Rs 75000 crore .
Corporate Social Responsibility
Conscious of the corporate social responsibility , South Indian Bank has launched the Money Lender-Free Village pilot project at Meloor in Trichur District of Kerala .The main objective of the Project is to replace the non-institutional, usurious, exploitative rural credit mechanism of private lending with lending through Self-Help Groups (SHGs)and direct lending by SIB. Under this initiative, SHGs act as extension of SIB to reach out to villages in even the remotest locations. This project though started very recently could garner acclaim from many quarters.
The bank has also commenced a rural empowerment initiative in Tholoor Panchayat in association with the Kerala Agricultural University. While the bank would provide the necessary finance ,the University would impart the requisite skills and technology required for the sustainable development of agriculture to the bank’s borrowers in the rural areas .The project ,applauded by Mr.S.Ramaswamy, Regional Director ,Reserve Bank of India , would be executed through the NGO called , “Organisation for Women Empowerment & Rural Development(OWERD) ”.
Inculcating the savings habit among the youth
The Bank has started the SB Campaign for this fiscal in July’08 with the corporate social objective of reaching banking technology among more people who are less affluent .Another objective of the bank as a responsible corporate citizen for starting this campaign is empowering our nation -which is emerging as a super power- by inculcating savings habit among the youth population which is the best opportunity that the country should make use of in order to dominate the world. This campaign of the bank has evoked overwhelming response all over India .
‘SIB Excellence Awards” For life-time achievement
“SIB Excellence awards were presented at the function held on 29th January 2009 to commemorate 80 years of service to the nation to the following five outstanding personalities for their life-time achievements and for transforming and impacting the lives of millions of Indians and thus helping India emerge stronger in various fields - Dr Verghese Kurien, Mr.Adoor Gopalakrishnan, Mr.K.J.Yesudas, Mr Yusuff Ali M.A and Dr.K.M.Cherian
Presenting the awards , Mr. Vinod Rai, Comptroller & Auditor General of India stated:“ The South Indian Bank in its journey of service to the nation has set immaculate standards of excellence in Banking”, adding, “the Bank showcases best in terms of standards and hence I call it as ‘Boutique Banking.”
The celebrations , having received wide print and visual media coverage, could reflect on the corporate transformation the Bank has recently undergone by which employees have been re-energized ,asset quality improved ,greater brand value created , superior technology acquired and profitability focused,.
Services for the NRIs
SIB, as the preferred bank of the Indian Diaspora (“Bank for the Pravasis”), had celebrated one-month long ‘Pravasi Utsav’ in September 2008. On that occasion the novel convenience product, “ NRE SB-Diamond” was launched exclusively for the NRE customers who maintain an average balance of Rs.50000/-.
South Indian Bank is the first private sector bank from India to provide management support to an exchange house in the Middle East. This enables SIB to provide top quality service to NRIs looking at remittances to India in a technology –driven environment .Three more licenses have been obtained for opening new branches of Hadi Express Exchange in Abu Dhabi, Dubai and Rasalkhaima which would enable SIB to provide quality service to more NRIs .
SIB also has become the first bank to go online booking-free of bank charges – through South Indian Bank Payment Gateway by devotees of Sri Krishna Temple, Guruvayur ,which is known as the Dwaraka of South India. Customers of the bank, besides the NRIs are now facilitated to effect offerings – on behalf of their aged parents also – with greater transparency and security at the click of a button.
SIB-A Customer- Oriented Bank
Despite acquiring the latest technological capabilities available to the banking industry in the country, the Bank will continue the emphasis on personalized customer service, which has been the Bank’s core strength for all these 80 years. Incidentally , the Bank had also been selected , in the Outlook Money – C- Fore Survey, as the best private sector Bank in India in the ‘Service Quality ‘ segment .
What Mr.Narayana Murthy Commented About Our Performance :
Announcing the total implementation of CBS in SIB ,Mr.Narayana Murthy , Chairman & Chief Mentor of Infosys Technologies who also has been elected as the Chairman of the Asian Business Council, said:”Completing one’s job in time and also with efficiency is a sign of excellence .This is where I’ve got tremendous respect for South Indian Bank ”. In this context Mr.Murthy referred to the dismal performance of the Indian Cricket team (in March 2007) who had commenced their celebrations even before the play , and said ,”South Indian Bank , on the other hand , had waited for one month to confirm the efficacy of the new system and then only celebrated, even though they had completed implementation of CBS in the month of February2007 itself .In India we usually celebrate even before performing one’s duties .So my earnest wish is –‘Let there be thousands to emulate SIB’s example’.
“South Indian Bank’s implementation of Core Banking Solution was seamless for the customers. It was also implemented in a manner that every employee was enthusiastically involved in it”, Mr. Narayana Murthy said adding , “ SIB had shown its commitment to the core values of excellence which include openness to new ideas, focus on speed, focus on innovation, excellence in execution .I’ve no doubt that with this commitment to the core values of excellence, SIB will be more successful in future”, Mr. Narayana Murthy concluded .