The Economic Times daily newspaper is available online now.

    BoB sets up two arms to quicken loan processing

    Synopsis

    The state-owned bank has set up Baroda Global Shared Services in Ahmedabad's GIFT city.

    ET Bureau
    MUMBAI: Bank of Baroda is setting up two subsidiaries – one for centralised processing of loans and the other for data analytics – both aimed at sharply reducing the turnaround time of loan disbursements, something that private banks have exploited to score over public sector lenders.

    The state-owned bank has set up Baroda Global Shared Services in Ahmedabad’s GIFT city to undertake credit appraisal activities across the nation. The data analytics company, approved by the Reserve Bank of India, will mine data and help put the bank on par with rivals such as HDFC Bank and ICICI Bank that are nimble-footed in reaching funds to customer accounts with pre-approved loans.

    Joginder Rana will head Baroda Global Shared Services as chief executive officer. The bank is looking for a CEO for its data analytics unit, which has formally started operations.

    “The shared services company will process loan proposals, which will not only bring consistency in processing of the loans, but ensure similar underwriting standards across the country and reduce the time cycle,” PS Jayakumar, managing director of Bank of Baroda, told ET in an interview. “There will be more time for customer acquisition and customer support. We want branches to be sales and service centres.”

    Four of the bank’s 13 zones have moved the processing of credit proposals to Baroda Global Shared Services. This unit will handle only retail loans – the processing of corporate loans will remain with the head office in Mumbai.

    The bank has set a 15-day target to approve corporate loans, cutting the current period of about 30 days. The lender is also digitising 90 years of records.

    A decade ago, Bank of Baroda had introduced a similar concept, where loan proposals of retail and small companies were processed in centralised back offices known as ‘factories.’

    “But at the time they were set up, there was no scanning and imaging, so files would move physically and processing was done centrally,” said Jayakumar.

    These 70 ‘factories’ will be converted into sales and service centres.

    “As a result of this, close to 600 employees are released for collection of bad loans,” said Papia Sengupta, executive director at the bank.



    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more


    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
    The Economic Times

    Stories you might be interested in