Three bank merger won't lead to job losses, says Karnam Sekar

Karnam Sekar, MD and CEO, Dena Bank during an interview with Swati Khandelwal, Zee Business, said the bank has adopted three processes to bring down the corporate non-performing assets (NPAs), which are National Company Law Tribunal, the sale to asset reconstruction companies and settlement through one-time settlement (OTS).

What is the progress on the merger plan of Dena Bank with Bank of Baroda and Vijaya Bank?

This is not a merger, it is an amalgamation of three banks into one and this amalgamated body would be the second-largest bank in the country after State Bank of India. All the MDs and EDs of three banks have formed a steering committee to look after the various phases of amalgamation. We have also formed sub-committees under the steering committee, which will take care of independent functional areas like HR, credit and IT related issues. Each of these committees is meeting at regular intervals and the steering committee is also meeting once in a week or 10 days, and we are taking it forward.

Will this merger lead to job losses?

No. The amalgamation will not lead to any job loss because several people, not only in these three banks, but across the banking sector, will reach the superannuation/retirement age in the next 2-3 years. Besides, the presence of Bank of Baroda and Dena Bank in North, mainly in Maharashtra and Gujarat, and Vijaya Bank in South can be termed as a perfect rationalisation of the business. This amalgamation is a perfect sync of the business and, therefore, we don't see any need for a reduction in the number of branches or the reduction of the workforce.

Dena Bank has launched 'Mission Dena 9999' to reduce the total NPA level. Where does it stand after two months of its implementation?

'Mission Dena 9999' was launched with an aim to reduce corporate NPAs. The programme aims at reducing its total NPA level from Rs 16,000 crore to less than Rs 10,000 crore, at least the largest four-digit number by March 2019. We have sorted out the groundwork and found three ways to address the problem and they are: To go to the last stage for those accounts that have been sent to NCLT and resolve them; to push good candidates for ARC sales at places the NCLT is not able to give a solution; to settle small accounts by sitting with the customer. Two to three big accounts have reached an advanced stage of resolution in NCLT and have stitched the penalty met stage and will be resolved may in a month or two months. We are trying to get at least Rs 1,300-1,400 crore from these accounts in the next three-four months.

We have conducted an ARC auction and will have one more auction in this month. We will also have one or two more auctions in the next quarter. The bank is going to the market with ARC sale and we are expecting an additional Rs 1,200-1,300 crore through this sale.

We are expecting a recovery of around Rs3,000-4,000 through OTS.