IMTians shaping the world- Student success stories of IMT Nagpur : BABITA AGRAWAL (Batch 2007-09) – Director at Standard Chartered Bank
Background: The company is into corporate and retail lending and has huge Retail and SME client base. Due to in-adequate due diligence and poor credit assessment in past two-three years, one of the zones of the company was facing huge problem of NPAs in their SME Portfolio which resulted in following issues:
- Total SME NPA % increased to as high a 40%;
- Yearly growth budget was in negative; and
- Credit Audit Score of the SME Branches (reporting to Zone) dropped significantly to “C-High Risk” category
Due to piling NPA, staff accountability was fixed, and officers were penalised. Very few officers wanted to work as credit officers now.
Action Taken: The management was highly concerned so they changed the leadership and appointed a new Zonal Head (ZH). Actionable taken by the new ZH:
Right person at right place: One experienced and young credit official (SME Head) was appointed at the Zonal level for monitoring entire SME portfolio of the zone. At the branch level also, Credit officers were changed, and new officers were appointed.
Sorting lemons in the portfolio and continuous review: Both the ZH and SME Head would get involved in sorting the good and bad accounts in the portfolio. Post identification of good and bad accounts, bad accounts used to be reviewed on weekly basis.
Team Work: Though the team was new, however, the ZH would ensure that the team works together, and the big picture was shared with each member of the Team at regular intervals.
Sharing the knowledge: Best practices across the team used to be shared with the entire team by the ZH. Regular workshops used to be arranged by SME Head personally to share credit knowledge among the newly joined credit officers.
Celebrating small successes: Small achievements of the team members used to celebrate in presence of ZH. This would increase the morale of the Credit officers and motivate them to do better.
Positive work culture (no blame game): If the member would commit any mistake then he/she would be counselled in a constructive way rather than putting blame on him/her.
Results: In just 2 years, following turnaround happened:
- NPA % dropped to less than 2% of the total portfolio;
- Zone overachieved their yearly SME Growth budget; and
- Credit Audit score of the SME Branches reporting to Zone improved substantially to “A-Low Risk Category”