Canara Bank firms up Plan to Recover Bad Loans

Interview /R K Dubey/Indian express/16 Mar 14

Canara Bank saw its net profit decline by almost 50 per cent in the third quarter of FY14. With higher provisioning for bad loans and accounts of big defaulters in its books, the Bangalore-based bank is looking to address concerns over rising Non Performing Assets (NPAs). Chairman and Managing Director RK Dubey tells Sharan Poovanna how the bank aims to recover from its not-so-memorable Q3 performance.

What measures will be put in place to recover from the poor Q3 performance?

Net profit showed decline y-o-y on account of higher provisions, which increased to Rs 3,087 crore from Rs 2,046 crore a year ago. The bank has strengthened its recovery efforts and monitoring system to contain NPAs in Q4. We are focusing on CASA (customers’ current and savings accounts), retail liability and retail assets growth, including MSME and agriculture, which will improve net interest income.

How does Canara Bank propose to bring down its NPAs given the big defaulters?

The efforts include monitoring high-value NPA accounts through specialized asset recovery management branches, monitoring newly slipped accounts to ensure better and early recovery, conducting Adalats at circle levels, one-time settlements (OTS) with improved offers, initiating SARFAESI action in all eligible cases, declaring wilful defaulters wherever applicable, filing criminal complaints in case of frauds, apart from filing recovery suits and extensive use of Lok Adalat mechanism. We have identified a portfolio of bad assets worth about Rs 1400 crore for sale to asset reconstruction companies. This is another step to improve our recovery.

How much has the bank provisioned for bad loans?

We have provided Rs 568 crore of provisioning for bad loans for Q3 FY14 (stand alone). Total provision for Q3 has gone up to `3,087 crore compared to Rs 2,046 crore a year ago. Canara Bank has initiated proactive steps to prevent the incidence of overdues. We are generating daily reports of accounts, which are likely to figure in special watch or delinquent list of accounts in the next 30 days. These accounts are flagged off to different functionaries to take steps to prevent them from appearing in special watch list of accounts on completing 30 days. We have also put in place a dedicated restructuring assets division to extend restructuring, depending on viability. With all these initiatives, we are confident our gross NPA ratio will be in the range of 2.6- 2.7 per cent as of March 2014.

What is the topline and bottom line target this fiscal? What are the challenges to achieve the same?

We aim to reach an aggregate business figure of more than `7 lakh crore with deposits growth of 16 per cent and advances growth of 22 per cent. With continued macroeconomic slowdown, several sectors are facing stress. Consequently, there is a spike in NPAs at the industry level. In our bank, we are taking special efforts to control NPAs and slippages.

What efforts will bank undertake to increase CASA?

The bank’s advances are growing at around 27 per cent at present much higher than the industry average. To improve the bank’s CASA deposits, we have introduced several measures which includes issue of debit cards for student, waiver of charges on banking instruments like demand drafts and money tranfers.

INTERVIEW : "The A-G Is Very Smart; He’s Also Socially Active And Smooth’

The outlook :18 Nov 2013

The activist-lawyer pulls no punches on the Attorney General

UTTAM SENGUPTA INTERVIEWS PRASHANT BHUSHAN

While his critics accuse him of misleading the court and of giving convenient and contradictory opinions to suit the government, Attorney-General Goolam Vahanvati has never been pulled up by the apex court or held guilty of misrepresenting facts. Activist-lawyer Prashant Bhushanpulls no punches and offers an explanation to Uttam Sengupta. Excerpts:

You and the attorney-general, to put it mildly, have no love lost between you. What provokes such antagonism?

A dishonest government needs a dishonest law officer to legitimise their corrupt decisions. And the present A-G unfortunately has been shielding the government’s questionable decisions.

You even called him a liar in court. Was that just courtroom bluster?

When he denied in court having seen the CBI’s status report on the Coalgate scam, I did say he was lying. By that time the letter addressed to him by the additional solicitor-general, Harin Raval, was in the public domain. Raval had quit and had stated that the A-G had misled the court.

But why didn’t the court pull him up then? Why was it so indulgent?

I can only speculate. The bench is possibly hesitant about taking action against the highest law officer of the government who is appearing before them every day. Perhaps they are meeting him socially and you do tend to be a little diffident in cases involving such people.

You say the A-G is giving dishonest advice to the government, shielding the corrupt and misleading the court. And yet the Supreme Court of India does not take any action?

His role in shielding Anil Ambani—who he calls a friend, in the 2G scam and Reliance Power case–and the Ruias are there for everyone to see. His advice in the disproportionate assets cases against Mulayam Singh Yadav and Mayawati are also questionable. And yes, the Supreme Court has been soft on the A-G.

Could the A-G have done things differently?

He could have recused himself from cases involving his “friends”. But he never did that.

Why do you think he gets away if his conduct is so questionable?

The attorney-general is, of course, very smart. All people like that are. He is also socially active and is smooth. He is very deferential to the court, very polite. The day I called him a liar in court, he came up to me and said, “Prashant, you must believe me. I really did not see the report.” When you are so brazen, you can get away with anything. Had his personality been different, had he been arrogant and aloof, the court’s attitude would have been different perhaps.

There are people in the bar, however, who are sympathetic to him. Former attorney-general Soli Sorabjee, for example....

Mr Sorabjee will be sympathetic towards all dishonest lawyers. When he was the attorney-general, he had attended a meeting in London with the Hindujas and their lawyers from the law firm of Clifford Chance. And the minutes of the meeting quoted him advising that the Hindujas should get the ministries to seek an opinion from him, and then he would give an opinion that would suit them. I had then written in Frontline criticising Mr Sorabjee.

What was the then A-G’s reaction?

The same as Mr Vahanvati’s. He came up to me and said, “Prashant, I wish you had checked with me before writing the article; I would have set the record straight.” It is a sign of the times. If tomorrow a video footage shows the A-G accepting money, I don’t think either he or the government would be perturbed. They would laconically say that the footage should be sent for forensic examination and that it was mischievous and mala fide. Nobody blinks an eyelid.

Has there been a precedent to Vahanvati’s conduct?

The only comparable name that comes to mind is G. Ramaswamy who was the attorney-general in 1990-91. But his tenure was short.