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For the banking industry, as it is with most other industries, the ongoing COVID-19 crisis has been a punch below the belt. It is still quite uncertain and there seems to be no clear indication of how the economy will be resurrected. According to a senior official from the City Union Bank Ltd, who is also the official spokesperson of the bank, “In the prevailing situation, it is very difficult to assess the impact over the medium and long term. However, we feel that the next two to three quarters will be very tough and the impact will be much more than expected.”

According to him, their total business increased by 17% from Rs. 61092 crore in FY 2018 to Rs. 71513 crore in FY 2019.  He added, “Since we are yet to declare our March 2020 results, we are not in a position to disclose the figures.  We can give the figures till December 2019.”

Detailed figures till December 2019

Source Source: City Union Bank

The spokesperson also answered certain questions in detail. Excerpts -

Q) What has been effects of the COVID-19 pandemic on the overall business of the bank?

A) There have been major problems on account of this COVID-19 pandemic. The manufacturers are expecting a decrease in their turnover and a substantial reduction in profits due to incurring fixed expenses without any business activity. The migration of labourers to their native places will further delay full/optimum capacity utilisation even after the lockdown is lifted. Export units are expecting delay in collection of receivables due to worldwide restrictions. They are also expecting a pile up of finished goods as shipment of orders will be delayed due to slow down in overseas business. Raw material importers are not certain about their future supplies which will further adversely affect their recovery post the lockdown. Traders are skeptical about their cash flows after the lifting of the lockdown as demand is expected to be low. It is clear from the above observations that the financial year’s closing figures for the banking sector and for our bank will be not as impressive as those of the previous years.

Q) To what extent has NPA effected the bank's reserves?

A) The details of our NPA movement over the last few years has been provided in a tabular form.

Q) How has digitisation helped your operations?

A) The IT strategy of our bank aligns well with our business strategy to provide customer services through sales and support. Further, the IT strategy is driven by new technological products and services that are being launched. We expect these advances to push up the efficiency of our employees and enhance the customer experience. We are focusing on driving the digital and self-service-banking segment throughout our branch network. Reduction of operational costs and providing a convenient banking experience for customers is also an important part of our IT strategy. This focus on digitisation has provided an impetus to alternate channels, thereby improving the percentage of alternate channel transactions to 94.71% as on 31.03.2020.

Our business strategy is aimed at making sales and service the primary area of focus for the branch staff rather than providing customer service through branch banking. By aligning our IT strategy with this and based on the forecast of branch expansions, self-service-branches are being promoted by providing technological services.  We have focused on ‘process automation’ as one of the key thrust areas.  We have successfully automated a large number of our daily activities and that has pushed up our productivity and reduced errors.  

Providing useful and intelligent inputs through data is important for aggressive marketing and business development. Using our data analytics platforms, various innovative products are being made available to our customers. ‘Business Process Reengineering (BPR) has been taken up in the past to revamp and improve our banking platform and services. By implementing a robust and competent BPR mechanism, we were able to scale up our operations by centralising various key functions.