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Cooperator par excellence
He is a dyed-in-the-wool Communist heading one of the most efficient and successful urban banks in Andhra Pradesh and dwarfing in the process some of the popular ones in the banking sector, managed by hard core capitalists. What is striking about his enviable banking wizardry is that he has correctly understood the role of a cooperative bank in extending micro credit to the less privileged sections, without sacrificing professionalism.
Meet Manam Anjaneylu, Chairman of the Visakhapatnam Cooperative Bank Limited and former MLA of the Communist Party of India. He has been at this Urban Bank's helm since 1983, when its membership was 1,800 with a deposit base of Rs.55 lakhs and advances totalling Rs.45 lakhs. No dividend was paid to the shareholders till then. A low-profile activist of the CPI moving his quill in the party organ, 'Visalandhra', as a sub-editor, Mr. Anjaneyulu was persuaded by his party colleagues to move to the port city and take up the task of putting it on an even keel, with the approval and blessings of the party leader, N. Giri Prasad.
``Fortunately for me, I could build up a good team on the board and we mopped up more resources and very soon the deposits touched Rs.1 crore. We paid the first dividend of 10 per cent to our members,'' he recalls with understandable pride. ''Thereafter, the bank was put on the fast forward trajectory and it started growing by leaps and bounds. Today we have on our rolls, 20,000 shareholders, and for the last fiscal (2001-02), a dividend of 25 per cent plus eight per cent interest on the deposits has been declared.''
In fact, for 2000-01 the bank had declared a dividend of 30 per cent, besides eight per cent interest on deposits. ''For 2001-02, we were under pressure not to pay such a high dividend by the Reserve Bank of India which wanted us to limit dividend and interest within 25 per cent and advised us to put a large slice of the surplus profit into the reserve fund. Otherwise, we would have declared a more handsome dividend.''
What is the secret of success of this bank---it ranks No.2 among urban banks in the State after the Mahesh Bank of Hyderabad and is bidding for the first slot in the coming years---when a number of similar institutions are faring badly?
``Our success is professionalism in handling people who bank with us. While we are liberal in extending credit to members and others, since it is for that purpose only the bank has come into being, we are strict about recovery of the loans. Our recovery rate is 94 to 95 per cent, since we take adequate care about the creditworthiness of loanees. So far, we have not taken recourse to the recovery mode through court. Our employees use their persuasive skills and induce the defaulters to repay.''
Mr. Anjaneyulu is all praise for the employees of the bank, which has 10 branches in the district and has applied for opening branches in neighbouring districts. ''They are the most dedicated lot and also shareholders. This sense of belonging enables them to work wonders. The bank also takes care of their interest. Their salaries and working conditions are on par with those of any Government bank. We have been paying them an annual bonus of 20 per cent,'' he says.
Why are the other banks not able to employ the same simple success technique?
``Unfortunately, they are functioning more like proprietory concerns than cooperative bodies. While, by and large, the urban banks have been able to husband their resources carefully, boards of some banks are packed with people with criminal intentions. They play ducks and drakes with the depositors' money and the net result is negative.''
According to him, there is a mushroom growth of urban banks, particularly in the Twin Cities---''101 banks have sprung up during 1995-2001 of which 21 are under liquidation proceedings and six or seven are already liquidated''---due to the ongoing liberalisation which, however, should not mean reckless licensing without application of mind.
Being a member of the experts committee that went into the functioing of the urban banks, after the collapse of the Krushi Bank, Mr. Anjaneyulu blames the State and the Union Governments for allowing closure of such banks. ''In my view, even they can be revived. The Government thinks that by protecting the depositors up to Rs.1 lakh through the Deposit Insurance and Credit Guarantee Corporation, its job is over. (Incidentally, the experts committee has recommended that the insurance cover should be raised to Rs.2.5 lakhs deposits). The Government should not allow banks to collapse. Both the Centre and the State Government should learn to differentiate between bank and its management.''
He feels that the Government has not taken adequate steps to book the criminals involved in the collapse of financial institutions like the Krushi Bank. "The committee has given a list of 68 urban banks which would collapse if they are alllowed to drift, but the Government is keeping mum.''
His another grievance against the Government is that it has asked various departments and agencies like Civil Supplies, Beverage Corporation and Regional Transport Authority not to do any business with cooperative banks. ''These agencies deal with us because we are charging less commission for the transactions than Government banks. If they stop dealing with us, they will stand to lose, affecting us in the process. This also sends a wrong signal to the public about cooperative banks,'' he laments.
With over 2,000 urban banks all over the country having mobilised over Rs.90,000 crores as deposits, Mr. Anjaneyulu says: ''The Union and the State Governments should realise that this is the most ideal and less expensive means of meeting the credit needs of the middle and poorer classes of people. They deserve encouragement rather than denigration by the powers that be in the name of liberalisation.''
R. SAMPATH
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