State Bank of Travancore sets staff targets for recovery

NPA WOES.

Source: Business Line,Vinson Kurian,Thiruvananthapuram, Sept. 10,2010

State Bank of Travancore (SBT) has laid out a roadmap for bringing down by 30 per cent gross non-performing assets from the ‘unprecedented' levels of Rs 918.69 crore as on June 30.

A communication from the Stressed Asset Management Department to employees has set separate milestone targets for September, December and March 2011 in this connection.

Accordingly, gross NPAs would be brought down by Rs 138 crore by September, Rs 230 crore by December and Rs 279 crore to Rs 640 crore by March 2011.

The high NPA level at the end of the first quarter of the current financial year was on account of slippages in certain large value accounts as well as retail accounts in the SME and personal loan segments.

“Apart from the loss of revenue, we need to earmark more amounts from our future profits to make provisions for these accounts.

Provision coverage

“Given the stipulation that such provision coverage should be at least 70 per cent (as against our coverage of 60.17 per cent as on June 31, 2010), you can well imagine the severe impact this will have on our net profit,” the communication said.

It is the duty and responsibility of every member of staff irrespective of his/her rank, cadre or designation to do his/her utmost to reduce substantially the level of the NPA and also prevent further accounts from slipping into that category.

The task as set out in the roadmap is quite daunting but by no means insurmountable. “We are confident that without collective and consistent efforts, we will be able to achieve these goals.”

The department has assessed that if each of the employee of the bank were to recover Rs 3 lakh-worth of NPAs, the goals set will have been met.

GUIDELINES ISSUED

While giving out separate branch/controlling office-specific guidelines, it directed that the endeavour of each employee should be to ensure that there is actual recovery in the NPAs.

All those working in a branch or in a controlling office have to become a member of the NPA recovery team of the respective offices. The others (in the Head Office or in offices and branches with nil NPAs) should voluntarily join branch/controlling office teams to supplement the latter's efforts.