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Press Release: July 31, 2004
The first series of the 'Corporate Leadership Lecture Series '(CLSS) held at Bharathidasan Institute of Management (BIM), Trichy, is addressed by Mr. M. B. N. Rao, Chairman and Managing Director, Indian Bank. It covered the whole gamut of Indian banking industry and turnaround strategy adopted by Indian Bank. The Indian Bank introduced lot of innovative practices in the Indian banking industry to pull itself from the red, it was the first to experiment with low interest rate in retail lending in India. This bold initiative has led to a revolution on home loans front after which lot of bank plunged in to it. The bank retains loyalty of customer due to quality of customer service. The bank could bring about a turnaround in past few years due to a series of measures including organizational restructuring starting with the elimination of 11 zonal offices, branch rationalization, where in loss making branches were merged with nearby measures and other cost control measures. Excess employees were entrusted with the task of marketing for the first time in the industry (every employee to introduce new customer to the bank). Securitization Act and Debt recovery Tribunal had helped the bank in reducing its NPA significantly. He attributed huge losses of the bank during the mid-nineties to introduction of prudential norms, less awareness on profitability and lack of expertise in credit appraisal system. The asset liability mismatch led to borrowing on high rate in cash money market. The bank, by virtues of strict implementation and monitoring of its three year (April 2000 to March 2003) restructuring plan, could recover in to profitability state in advance from billons of losses. 'belt tightening' rather than fund infusion, was vital for restructuring an organization. He said that Low interest rate regime is good for banking industry; high interest rate was neither good for the economy nor the banking industry, which would suffer on account of corresponding escalation of NPA (non performing assets). He mentioned that a leader should lead him as an example for others to follow. Apart from it he also shared the success secrets of his friend Mr. Lakshmi N. Mittal (LNM group, UK). He gave insight about the crucial role of financial management in organizations success. And insisted that meeting and formation of committees would be meaningless with out perfection. He called upon the students to shed the mentality of finding career options in perfectly run multi-national companies which account only for 20% of enterprises in the country. Mr. Rao insisted that the students should be prepared to take a job in any enterprise and bring a turnaround. On responding to a query the BIM Director, M. Sankaran said that the lecture series were aimed at giving right orientation to students making them not just intellectually fit but also value-oriented. Lecture Series came to a culmination with Dr. Y. Lakshman Kumar, Placement Chairman, thanking the bank for extending educational loans worth Rs. 1 crore to the current batch of MBA students. Contributed by - |
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