Dena Bank in big revamp

Dena Bank is undertaking a massive recast exercise. The public sector bank proposes to close down 50 branches and recruit mid-level staff in addition to specialised officers this year.

The bank, which was suffering heavy losses a few years back, intends to trim its branch network from 1,130 to 1,000 by March 2006. The recast is aimed at consolidating the urban banking operations, save on day-to-day operational costs and improve productivity.

"We will only merge branches in the metro and urban areas," said A K Khandelwal, chairman and managing director of Dena Bank. He explained that there were too many branches located close to each other in urban areas, which is not a gainful equation. Dena Bank is recruiting 275 officers to ensure efficient operations. Of these, 100 will focus on agriculture finance.

"The officers will be trained about the crop pattern of the respective areas. They will be deployed in the rural branches to promote rural finance," said Khandelwal.

The bank had recently recruited 70 software professionals and plans to recruit MBAs and chartered accountants. It proposes to add five deputy general manager posts. These would be lateral recruitments and the pay packages would not disturb the overall salary structure of the bank, said senior bank officials. Dena Bank has staff strength of over 14,000.

The primary reason for the branch restructuring in the metros is the high rental costs.

"We can't pay Rs 40 lakh as rent when the income from a branch is Rs 15 lakh," said a senior official from Dena Bank. A number of branches that were within 1.5 km of each other in large cities were merged since they were found to be unviable, he added.

For instance, two branches in Matunga, a western suburb of Mumbai, were merged. Similarly the Zaveri Bazaar branch was merged with the one on Princess Street, both located in south central Mumbai.

Dena Bank has also removed two regional offices in Gujarat, which is its stronghold. The bank now has 18 regional offices of which six are in the state.

The bank has fully computerised 680 branches and partially computerised 242 branches. It intends to introduce a core banking solution to network its branches. The bank, which plans to float a Rs 80 crore public issue, is aiming for a business growth of 20 per cent in financial year 2004-05.

Dena Bank had been put under Reserve Bank watch in 2003 with alarm bells ringing on the three parameters of low capital adequacy, high net NPAs and abysmally low return on assets.