V. P. Srivastava Chief Financial Officer & Treasury Head, Bank of Maharashtra

Gaining Ground With Digital Optimisation

Bank of Maharashtra has been working hard on solidifying its digital infrastructure to let its customers enjoy the conveniences of any time banking with immediate transactional results.
V. P. Srivastava, Chief Financial Officer, Bank of Maharashtra, in this interview indicates that the results have been impressive with the bank taking long strides towards growth.

How are you leveraging your digital banking platform to expand financial inclusion, particularly for underserved communities? 

The Bank is committed to expanding financial inclusion and supporting underserved communities through various digital initiatives. Key initiatives include:

1. Straight Through Processing Journeys (STP)

• PM Svanidhi: A digital journey for the PM Svanidhi scheme, facilitating end-to-end loan processing for street vendors without manual intervention.
• Kisan Credit Card (KCC) through Jansamarth in Karnataka: Digital onboarding for KCC with automated land verification and credit checks.
• KCC Review/Renewal: Digital process for reviewing and renewing KCCs up to ₹3 lakh.
• Kisan Tatkal Scheme: Provides loans for ancillary agricultural activities.
• MUDRA Loan (Shishu): Offers microfinance for small businesses.

2. Co-Lending Journey

The Bank has partnered with NBFCs such as MAS, LendingKart, Loantap, Incred, and Muthoot to provide loans to underserved sectors at affordable rates.

3. FI Gateway

Bank has made live the FI gateway to address current FI demands, and also to accommodate new BCs in a revamped architecture with a dedicated thin client (URL) based solution under a common version module. 

Additionally, the Bank is digitalising the financial journeys of the PM Vishwakarma scheme and loans to Self Help Groups (SHGs) through the National Rural Livelihood Mission (NRLM). The Bank also utilised Robotic Process Automation (RPA) for disbursing funds under the Namo Shetkari Yojna to 8.5 million beneficiaries using the Aadhaar Enabled Payment System (AEPS). 

Do you have any specific initiatives or products aimed at increasing access to financial services for individuals without traditional banking access?

The Bank offers several initiatives aimed at increasing access to financial services for individuals without traditional banking access:

1. Pre-approved Personal Loan: Quick loan approval for salaried individuals and professionals.

2. Loan Against Deposit (LAD): Customers can avail of loans against their fixed deposits through the Mobile Banking App.

3. Video KYC 24/7: Enables account opening via video KYC, available even on holidays.

4. Loan Balance Confirmation B2G2: Digital signing using Aadhaar authentication.

5. Digitalization/Technology Upgradation: An allocation of ₹1,000 crore for IT infrastructure aims to enhance the banking experience. Over 40 processes have been automated using RPA to increase service efficiency and compliance. 

Can you share some insights on how customer behaviour and preferences are informing the development of your digital banking platform?

Bank of Maharashtra continuously evolves its digital banking platforms based on customer behaviour and preferences:

• Feedback Channels: Surveys, feedback forms, and social media interactions (WhatsApp, Facebook, Instagram, LinkedIn) help the Bank to understand customer needs and pain points.
• User Behaviour Analysis: Identifies popular features and areas with low engagement.
• Transaction Pattern Monitoring: Guides the Bank in tailoring services to customer preferences. 
• Market Research: Benchmarks against competitors and identifies best practices.
• Feature Development: Prioritises new features based on customer demand and feedback.
• Security Features: Robust security measures address concerns about online transactions, promoting customer confidence.
  
  By actively monitoring and responding to customer feedback, the Bank ensures its digital banking platform remains userfriendly, relevant, and aligned with customer needs. 

What is your outlook on the interest rate trajectory?

The Indian benchmark yield (7.10 per cent GS 2034) is hovering around 6.95 per cent to 7 per cent. Despite a higher CPI reading of 5.08 per cent in June 2024, yields were moderated by expectations of a US Federal Reserve rate cut and strong foreign portfolio investment (FPI) flows into Indian bonds. Factors such as stable governance, favourable FPI inflows, and a positive monsoon outlook have bolstered market confidence, though concerns about inflation and geopolitical tensions persist. 

The inclusion of Indian government securities (G-secs) in the JP-Morgan bond index is expected to attract more foreign funds, improving liquidity. The Government of India’s commitment to maintaining the fiscal deficit below 5 per cent in FY25 also supports market sentiment. The 10-year benchmark yield is expected to range between 6.80 per cent and 7 per cent with a positive bias. 

Please shed some light on your recent Quarterly Results for Q1FY25.

Business Growth : The Bank’s total business grew by 13.5 per cent year-on-year, reaching ₹4.76 lakh crore. Advances increased by 19 per cent to ₹2.09 lakh crore, with significant growth in the Retail, Agriculture, and MSME (RAM) segments. The corporate book also grew by 11 per cent year-on-year. Deposits increased by 9 per cent, with a CASA ratio of nearly 50 per cent. 

Profitability: The Bank’s Return on Assets (ROA) and Return on Equity (ROE) improved to 1.72 per cent and 27.62 per cent, respectively, driven by a 47 per cent increase in net profit yearon-year. The Net Interest Margin (NIM) rose to 3.97 per cent, with a healthy Credit-Deposit (CD) ratio of 78.17 per cent. The Cost to Income ratio stood at 37.87 per cent, one of the best in the industry. 

Asset Quality: The Gross Non-Performing Assets (GNPA) and Net Non-Performing Assets (NNPA) ratios were at 1.88 per cent and 0.20 per cent, respectively, reflecting effective control of fresh slippages with the strong Provision Coverage Ratio (PCR) of 98.36 per cent. 

Capital Adequacy: The Bank maintained a healthy Capital to Risk-weighted Assets Ratio (CRAR) of 17.04 per cent. 

Overall, the Bank of Maharashtra has demonstrated consistent performance, continuing its positive growth trajectory and strengthening its balance sheet and customer offerings.