Axis Bank recasts retail banking

Instead of products, consumer groups come into focus.

After restructuring its corporate banking operations, Shikha Sharma-led Axis Bank, the country’s third-largest private sector lender, has initiated a comprehensive recast of its business, including the retail side.

While a large-scale recast is likely to be discussed by the board shortly, marking a fundamental shift in the way it goes about its retail business, the bank has regrouped its operations under two new divisions. One will be known as mass and mass-affluent banking, while the other will be called affluent banking.

“Earlier the retail set-up was organised on the basis of products. Now, the operations will be organised on the basis of customer groups,” said Snehomoy Bhattacharya, president (human resources) of the bank.

Manju Srivatsa, who was previously head of retail banking, will now head the mass and mass-affluent banking division. The lenders retail assets, retail liabilities and credit cards groups will be housed under this division. The bank’s priority banking offering is part of the mass-affluent category.

Sonu Bhasin will head affluent banking, which includes the bank’s fledgling private banking group. Bhasin was previously president (retail financial services), which oversaw distribution of third-party products such as insurance and mutual funds.

There will also be some new faces at Maker Tower, the looming high-rise overlooking the Arabian Sea, which houses the bank’s headquarters. The lender is looking at bringing in a new head for retail assets and credit cards, which are currently two separate groups. According to sources, the top candidate for the job is Jairam Sridharan, who is currently with US-based lender Capital One Financial and has worked with ICICI Bank in the past.

He will be Shikha Sharma’s second senior recruit after V Srinivasan, who left JP Morgan to join Axis Bank as executive director for corporate banking in September.

The bank has already seen one high-profile exit in Hemant Kaul, who was executive director of retail banking and also in the running for the position of chief executive officer.

According to sources, the bank is also planning some changes on the human resources front and may increase the number of grades.

Axis Bank has scrapped the practice of having a separate division for distribution of third-party products. Now, each of the two divisions will look after third-party distribution among their respective customer segments.

In keeping with the theme of customer service, the bank has merged its operations and IT divisions and split them into retail operations & IT and wholesale operations. Retail operations and IT is headed by Rajagopal Srivatsa, who was previously head of business banking. The division will deal with customer service issues such as new account openings, follow-ups and cash management.

Axis Bank has retail assets worth Rs 17,984 crore as on September 30, accounting for 22 per cent of its loan book. The percentage of retail assets on its loan book is much smaller than other large private such bank such as ICICI Bank (45 per cent) and HDFC Bank (54 per cent).

The sweeping changes in the bank’s retail operations come close on the heels of the recast in the bank’s overall structure. In October, Axis Bank had organised its business into strategic business units -- retail banking, small and medium enterprises (SMEs) and agriculture; corporate banking; non-banking retail subsidiaries and corporate centre. Earlier, the bank had a vertical structure with executive directors in charge of retail, corporate banking, mid-corporate and SME banking, and IT and business process.

The lender has also brought many changes on the corporate banking side. Most notably, it has put together a 60-member strong group headed by Siddharth Rath to focus on lending to the infrastructure sector, which is the biggest contributor to the bank’s corporate loan book. The lender has also created the position of a chief risk officer, which has been filled by Bapi Munshi, earlier president for treasury.