India’s financial titan with many first

Canara Bank has been blazing a trail of enviable success for over a century. Since its inception the bank continues to win customer confidence and trust as is starkly evident in its tripling profits this year

India’s financial titan with many first
L V PRABHAKAR, MD and CEO, Canara Bank
OLM Desk 21 September 2021

Banking institutions are the barometer of a country’s economic status. India’s remarkable resilience during successive global crises over the years has been spelt out by homegrown financial institutions which have held their own, often with soaring profits. One Indian banking behemoth has been blazing a trail of enviable success for over a century. Since its inception in 1906, Canara Bank continues to win customer confidence and trust as is starkly evident in its tripling profits this year.

The Bengaluru-based organization’s net profit for the first quarter of 2021 almost tripled to Rs 1177 crore from Rs 406 crore last year. “A good bank is not only the financial heart of the community, but also one with an obligation of helping in every possible manner to improve the economic conditions of the common people” - A Subba Rao Pai.

SCORING HIGH IN THE FINANCIAL SUPERMARKET

At the centre of Canara Bank’s success is its people-first philosophy. Not surprising then that the bank’s credo has been to expand its services to all spheres of wealth management that every Indian seeks. The numbers speak of its winning trust over its massive customer base to keep their money safe. The bank’s high operational efficiency is evident in its Current Account Savings Account (CASA) deposits which increased by 12.91% this quarter. Its net interest income (NII) - the difference between what the bank earns on loans and gives out on deposits - rose by 0.8 % to Rs 6147 crore, while Savings Bank deposits grew by 14.38%.

At a time when people are cautious about borrowing, Canara Bank’s gross domestic loans were up 6% to notch up Rs 6.6 lakh crore. This was primarily driven by loans for housing and vehicles. The bank’s disbursal of housing loans were up 13% and vehicle loans stood at a 9% high.

THE ROAD TO WEALTH INCLUSION

Borrowing a loan is just one aspect of realizing one’s aspirations. Repayment is a different ball game where most borrowers falter in the event of their rocky financial situation. During the first quarter, Canara Bank reached out to the marginal borrowers through its unique One Time Settlement (OTS) route to recover small value unsecured loans. The OTS is a scheme where the bank knows that chances of full recovery of the loans are low. So the bank agrees to the recovering of a smaller amount so borrowers can breathe easy. “In the last three months, due to the pandemic impact and no security of their money especially among our small borrowers, we conducted recovery adalats and various contact programmes for the borrowers to come forward to repay,” shares LV Prabhakar and CEO, Canara Bank. “This included 89,000 loan accounts with total outstanding loans of Rs 1950 crore where we recovered Rs 1300 crore,” he adds. The bank’s gross nonperforming asset (NPA) ratio came down to 8.5% of its loan book as on June 30, 2021, down from 8.8% last year, while the net NPA fell to 3.4% from 3.9%.

THE BEDROCK OFENRICHING LIVES

Indians have traditionally been comfortable banking with an established organization where generations of families have entrusted their money to watch it grow. For Canara Bank, it’s been a century of familiarity, and one that breeds confidence among its growing customer families. The bank opened 138 lakh accounts under the Prime Minister’s Jan Dhan Yojana and mobilized CASA deposits of Rs 6103 Cr as of June 2021. Till date, Canara Bank’s rich repertoire includes 9877 branches in India out of which 3047 are located in rural areas, 2853 in semi urban locations, 1973 in urban areas and 2004 in metros besides a total of 11,819 ATMs across the country.

GROWING GLOBAL GRAPH

The bank’s meteoric growth trajectory towards its financial goals overseas well-established. Ever since Canara Bank opened its Foreign Exchange Department way back in 1953, its successful international foray is evident in the outstanding figures.

The bank’s Global Business increased by 9.38% (YoY) to Rs 17,06, 422 Crore as on June 30,2021 with global deposits at Rs 10,21,837 Crore, significantly up by 12.34% (YoY). Gross Global Advance stood at Rs 6,84,585 Crore up by 5.23% (YoY). Canara Bank has branches in New York, London, Dubai, Moscow, Sharjah, Hong Kong, and Dar Es Salaam in Tanzania.

PIONEER IN SAVINGS BANK ACCOUNT

Till 1920, customers only had fixed deposit accounts in their bank as a mode of savings. Canara Bank was the first financial institution to introduce the savings bank account in 1920. However, it had rigid norms - customers could deposit a maximum of Rs 1000 and a minimum of Re 1. No customer was allowed to carry a balance more than Rs 2000 in the savings account. Like it is today, customers did not have the freedom to withdraw money whenever they wanted; they had to give prior notice of 3 days to the bank before withdrawing their money. Only banks had the freedom to fix the interest rate on deposits.

For any accomplished enterprise to flourish and sustain its glory, it has to focus on nurturing society. Canara Bank stands tall in the banking industry for giving wings to many MSMEs and an Indian’s dream through their Retail products over a century. By empowering small and marginal farmers across India’s remote rural landscape through its easy credit schemes, our Bank has been greatly responsible in illuminating the lives of the agrarian community and turning the agriculture sector into a powerhouse. Our

Bank has created myriad means of livelihood for marginal sections of society through disbursing credit with partial recovery of unsecured loans. Following the philanthropic philosophy of our founder, we have been espousing charitable causes through our life-changing social initiatives at the grass root level. As Canara Bank steps into it 116th year of meritorious service this year when India is turning 75 years young, it is our constant endeavour to continue our steadfast commitment in the service ofa billion and more Indians.

– L V PRABHAKAR, MD and CEO, Canara Bank

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