The document analyzes the performance of Kubera Bank's Lakshminagar branch and identifies issues like low priority sector lending, low growth, low profitability, and HR problems. It finds reasons for these issues such as low deposits, high NPAs, failure to attract customers. A business plan for 2020 outlines targets to increase deposits, advances, and CASA while decreasing NPA ratio. Recommendations are made to increase various types of lending, use legal recovery means, offer one-time settlements, optimize staff, and introduce other strategic initiatives.
5. Reasons for Low priority sector
advances
Low priority sector lending need for stepping up
Agriculture loans are low
Not enough encouragement to SE
Low level of MSME-MUDRA
Lack of marketing efforts
Low Financial education
6. Financial Growth Analysis in %
CAGR
Deposit Advance NPA Total Income
CAGR 0.91 3.99 7.53 -14.73
Here we have taken 2011 as base year for all other years
2011 2012 2013 2014 2015
Deposits 100 1.54 -3.08 3.08 4.62
Advances 100 5.41 16.22 18.92 21.62
NPA 100 18.75 21.88 31.25 43.75
Total Income 100 14.29 -11.61 -53.13 -54.91
8. Reasons for Low Growth
Stagnant business
Low deposits
Low advances
High NPA
Failed to attract new customers
Failure to retain exisisting clients
Idle staff
9. Reasons For Low Profitability
Low CASA 13%
High cost deposit
NPA 4.6%
Poor credit take off
High operating cost
Low priority for recovery
Low level of consumer and personal loans
10. HR ISSUES
Over staff
High wage bill
Improper staff assessment
Lack of training
No reward and punishment
Agency problem
11. LACK OF MONETORING BY HIGHER AUTHORITIES
Lack of control-over branch
Lack of accountability
Indiscipline
Low motivation
Inadequate supervision by the controlling office
13. Remedies framed for rescuing the branch:
• Increasing the CASA accounts
• Increasing priority sector lending
• Increasing of other advances-Non priority
• Increase retail lending-Salary loan, consumer loan,
Gold loan etc.
15. SARFAESI Act
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 allows banks and financial institutions to auction properties
(residential and commercial) when borrowers fail to repay their loans without
intervention of the court.
It enables banks to reduce their non-performing assets (NPAs) by adopting measures
for recovery or reconstruction.
This act is considered only for NPAs costing 1 Lakh and above and for non agriculture
purpose.
16. One time settlement offer
Payment terms
one lump sum
25 % down payment and balance payment in within period of 45 days
25 % down payment and balance payment in 12 monthly installments.
17. HR REMEDIES
No of staffs to be reduced
Reduction in staff cost
Incentive for NPA recovery
Job rotation
Training and motivation for employee participation
18. Proposed staff strength
Bank manager-1
Assistant manager-2
Field officer-1
Single window operator-6
Sub staff-2
19. OTHER STRATEGIES
• Introduction of biometric ATM’s
• Computerization
• Tie up with organization for maintaining salary account.
• Providing infrastructure loans.
• Educating society regarding cashless India.
• Trying to get more pension funds.
• Maintaining customer grievance redresses.
• Bancassurance.