Wish you and your family a very happy and prosperous DEEPAWALI
R.L.GROVER D.K.PAUDDAR S.S.SHISHODIA
Chariman President Gen. Secretary
19th Septembers, 2015
Oriental Bank of Commerce
Marching on the path of Restoring its Past Glory
Comrades! You must have gone through the detailed circular of our Association uploaded on our web-site www.aioboa.org . While we congratulate you all for your great unity and commitment towards the organisation, we recall and remind the highest level of commitment of our members towards our loving Bank, on the grounds of which we have built our Bank, brick by brick with our dedication, devotion and sincerity. This is the time when we all must know the truth and facts, situation and position of our beloved bank ‘OBC’ and rise to the occasion. In fact our position is not as sound as it was. We are struggling hard. Despite of our best efforts business is not growing.
We, as the responsible Association have always been stressing upon and impressing our members to garner more of CASA deposits and extend credit in retail segment so that sufficient spread is available for the bank to register good profit. Our MD & CEO also emphasized to enhance Retail business many fold in the Bank to earn more profit and to have spread covering large number of clienteles. Our CASA level is at 23% whereas other Private and Public Sector Banks have 33% average CASA. This directly means on (33%-23%) i.e. 10% deposits we are paying 9% or more interest which is a loss making.
As you all know, formation of Capital in the Bank from profit is the sound capital and easy means. Presently Govt. has given capital fund to only 9 Banks which means we do not come even in 50% of the total Public Sector Banks of the industry. Thus funds were given by Govt. to efficient Banks, which also means in the eyes of the Government our Bank may not be that much efficient. Earning on asset and Net Interest Margin (NIM) in our Bank is very low, due to this we are rated as inefficient. Our profit is eroding for which alternative delivery channels & out-lets like ATM, BC's, Net Banking must be used to the optimum level.
Presently we are using only 33% of alternative delivery channels (ADCs) whereas other banks are using more than 60% of alternative delivery channels. Due to this there is over load of work and we are to attend more customers which results in impairment of our services. If we improve & best utilize our alternative delivery channels we can provide best customer service and in that case we can attend the customers in much better way and improve our quality capital as well as earn more profit. The unutilized capital in the extended facility is causing blockage of capital for which we are not able to earn more profit, hence we need to rationalise it. We are not able to earn more profit because our return on asset (RAO) is reducing. If we realize and act prudently and with care our capital will grow and start earning profit for the Bank.
To overcome from the present situation our MD & CEO Shri Animesh Chauhan sir has given a very practical solution to this staggering and sluggish growth of our bank. Each and every member of the Association need to grab, understand and act as per the practical strategy outlined by him. The line of action and the measures suggested are as under:
- RAM credit (Retail loans, Agriculture, and MSME).
- Reduction of NPA and stoppage of fresh slippage.
- Growth in CASA deposits.
- Promoting ADC (Alternative Delivery Channel).
By circulating this strategy, the management has discouraged corporate loans as well as bulk deposits at this critical juncture of bank’s position. These suggested measures go in line with consolidating and strengthening the bank’s Balance Sheet. Looking in to the gravity of present scenario under which the bank is passing through, it is our prime responsibility to work with more vigour and strength with juvenile spirit to bring back our past glory.
In the midst of this, we appeal all our members to rise to the occasion and contribute the best possible for the sound growth and speedy progress of the Bank. Our progress lies in the growth of the Bank. Let all of us join together and rededicate ourselves in the making of this great institution. The time demands from each of us:
- It is time to rise to the occasion,
- It is time to fight to overcome the situation,
- It is the testing time for every individual to out-perform,
- It is time to do or die,
- It is the time to save the bank.
- It is the time to restore our past glory.
Be vigilant, check frauds and do not compromise with policies of the bank and laid down systems and procedures. Prevention is better than cure. As such, there is nothing to worry hence go ahead, march forward with vigour and strength, unity and team spirit, dedication, devotion & commitment, to restore our past glory.
With revolutionary greetings,
(S. S. Shishodia)