Manipal-based public sector lender Syndicate Bank has created two new business verticals, mid-corporate and fee-based income, to increase its non-interest income and improve response time. The two verticals have been operational since a month.
“Feedback from companies, especially mid-sized units, indicated they were not getting decisions on time. They give us better business,” said Chairman and Managing Director M G Sanghvi. With expansion, these units would enter a large business network, and this would create demand for a host of sophisticated products and prompt services. “We do not want to lose out on account of quality and delayed response,” said another bank executive.
Besides nurturing corporate business, Syndicate Bank would also try to push fee-based income through a separate vertical. It would help cross-sell financial products—mutual funds and insurance—to retail clients.
In the quarter ended June, the bank’s income from commission and brokerage fell 9.26 per cent to Rs 118 crore, compared with Rs 130 crore in the corresponding period last year.
The bank has already signed pacts with two asset management companies, Birla AMC and Reliance AMC. It would also sign such deals with HDFC MF and ICICI Prudential, said a bank official. The bank is also foraying into the life insurance business, through an equity partnership with an existing life insurance company.
Syndicate Bank has identified a life insurance company as a most preferred partner and plans to take up the valuation of this company, including its actuarial model verification, soon. It would appoint an actuarial consultant for the valuation.
The bank has also entered into strategic tie-ups with Tata Motors, Karnataka State Public Service Commission, Asit C Mehta Investment Intermediaries and MasterCard to improve fee-based income and provide value-added services.
