April 2016, Bank of Baroda, started on its transformation journey to derive higher growth, with competitive benchmarking of products program, refinement of processes and technological implementation of loan process system. We also increased our distribution network by introducing channel partners & digital DSAs.
While we made all these changes, the objective was to have quality business growth and hence, we were the first bank to introduce risk-based pricing linked with the credit information bureau for retail loan segment to incentivize the good customers by offering a lower rate of interest. Hence, the theme of growth with quality was laid down in the bank.
Over the last three years, the results of these measures led to almost doubling the retail loan book from Rs 43936 cr to Rs 86202 cr, in home loan & auto loans, respectively, while the banking industry has been grown at 19% & 6.5%. In the last Financial Year, we have grown at 23% in home loan and 51% in auto loans. In education loans, we have grown by 21%, while the industry has de-grown by 2%.
The retail loan book consists of 85% of cases which are backed with a mortgage, the portfolio is also well balanced with 38% book are PSL assets.While we have grown the book, our constant endeavor has been to build a quality asset book. The NPA position as on March 2019 has reduced to 1.77% from 2.82% in March 2018 and 4.16% in March 2016. Our call center uses various tools like SMS to follow through on pending payments with customers.
Post the amalgamation and increased distribution of branch network we will be able to grow faster than industry growth. In Q1 of FY 19-20 Retail loan growth was 20.5% Y-o-Y and within retail loans, Home Loan growth was 17.13% and Mortgage Loans at 47.57%, Auto Loan at 33.18% and 14.42% in Education Loans
In Home loans our focus is on quality housing projects and we have 3095 approved projects, 5000 DSAs selling mortgage based retail loan products, 8 Digital DSAs and our thrust has been on takeover of quality home loan accounts with minimum documentation.
Bank is focusing on two segments in Education Loan – Unsecured loans for students pursuing studies in identified Premier institutions and Secured loans for students pursuing studies abroad and pursuing high-cost courses in India. We have tie-ups with overseas education consultants and premier institutes to increase our quality loan book. We expect to grow at a good rate here
In the July 2019 our Higher education loan product has been adjudged as the ‘Best Buy’ for customer by ‘Consumer Voice’, organization supported for its efforts by the Dept of Consumer Affairs, Food & Public Distribution, Govt of India under ‘JagoGrahakJago’ Campaign. They have compared various parameters including Loan amount, processing fee, repayment period, Loan Study Options and above all feedback from the existing customers of various Banks (14) considered in this survey.
In Auto Loans, we work through tie-ups with various car manufacturers and dealers and organize regular joint activities like Car Loan Mela. We engage with our Corporate Clients to get access to their employees for selling retail loan products. Our dedicated teams of Mortgage Sales Officer, Auto Loan Officer and Education Loan Officer are meeting customers at their doorstep thereby enhancing customer delight.
We see Rajasthan as a key market, being the SLBC convener with 715 branches in the state, customer base of 1.17 Cr and would like to grow in retail loans in Rajasthan, We have 10.66% market share in Home Loan , 11.66% in Auto Loans and 11.44% in Education loan , we see various potential centers in this state. Envisaging good growth, we have launched a special takeover scheme for housing loans called ‘Switch Karo, Save Karo’ where in customers can avail better interest rates offered by us by switching over with minimum documentation.
