Pwc, Kpmg To Pen Bank Of Rajasthan Recast

Bank of Rajasthan (BoR), which is expected to come out of the red this year, has appointed PricewaterhouseCoopers and KPMG for organisational restructuring. The new managing director and chief executive director K M Bhattacharya now faces the challenge of cleaning and strengthening the bank's balance sheet. Bhattacharya, who was earlier the executive director of IndusInd Bank, was recently conferred the degree of Ph.D. in economics by Rabindra Bharati University of Calcutta for his thesis "Role of Banks for Poverty Alleviation" - based on a case study of West Bengal and Uttar Pradesh. In an interview with Sangita Mehta, he listed out his priorities and target for the bank.

 

What is the task cut out for the consultants?

KPMG will redefine the bank's strategy and business plan, while PricewaterhouseCoopers will review its treasury, investment and funds management structure and system. On the technology front, the bank has engaged Infosys Technologies. We are planning to integrate operations of our fifty large branches on `Anywhere Banking' platform and install five ATMs in the current year.

How has been 1999-2000 for the bank?

Total deposits of the bank stood at Rs 3,300 crore (Rs 3,058 crore), while advances was at Rs 1,983 crore (Rs 1,757 crore) as on March 31, 2000. The balance sheet is still under finalisation and is expected to show a reasonably good net profit for the fiscal year ended 2000 against a loss of Rs 67.46 crore reported in 1998-99. For fiscal 2000-01, we have projected a net profit of over Rs. 32 crore.

What is the current status on the bank's NPA level?

The gross and net NPA levels for fiscal 1999 stood at 20.55 per cent and 9.50 per cent, respectively. The balance sheet for the year ended March 2000 is still under finalisation. However, we expect the gross NPA level to be brought down by at least 2.50 per cent from the previous year with a marginal decline in net NPA level. The bank has also succeed in recovering over Rs. 50 crore.

The bank's CAR is lower than that stipulated by RBI, how does the bank plan to hike it ?

The bank's CAR is expected to be at 5.98 per cent for fiscal year ending 2000 which comprises 5.28 per cent of tier -I.

The bank raised Rs 67 crore through a rights issue in 1999-2000 and an additional capital of Rs 67-100 crore is expected in this fiscal on account of conversion of warrants. The amount of fresh capital will depend on the price fixed during the conversion.

With the proposed capital infusion together with internal accruals for fiscal 2000-01, we expect the Tier-I capital to cross Rs. 200 crore as on March 2001 and CRAR to reach a level in excess of 10 per cent.

What are the issues of concern for the bank and how does the bank plan to address them

At present, the major issues before the bank are : Technology upgradation on a scale which matches the contemporary market and customer expectations, secondly, skill upgradations across all sections of employees with appropriate infusion of new talent from outside wherever necessary.

Further, imparting necessary and requisite business focus by clearly outlining the business strategy keeping in view our size and strengths, with a view to reduce the cost of deposits by at least 1 per cent i.e., from 9 to 8 per cent by March 31, 2001 and growth of deposits and advances by 20 per cent each, and, finally, reduction of gross NPA level by about 4 per cent during

2000-01.