S Sridhar, CMD, Central Bank of India and chairman of the National Housing Bank, talks to Moneylife editors Sucheta Dalal & Debashis Basu on how he plans to shape the future of CBI. This is the final part of a three-part series

Sucheta Dalal & Debashis Basu (ML): Central Bank of India has a history of strong trade unions. What has been your experience in dealing with unions?

S Sridhar (SS): There is a way of handling unions. First of all, they are white-collar people. There are many people actively working in the unions, who would have been in the top management of banks, if they had taken their promotions. They are bright people. One has to take them into confidence and ensure that they feel they are contributing. Generally, I have tried to be fair and transparent and show that there is no personal axe to grind. We have said that there will be zero tolerance for anything mala fide, but I had issued a written circular that as long as there is a bona fide business judgement we will protect you. That is a promise I have kept; but when there are mala fide actions we have even dismissed people. So I have had no problems at all. There may be some minor irritations or issues, but that is to be expected.

ML: What are your priorities at Central Bank?

SS: The priority is to make Central Bank a modern bank - it has been lagging over the years. When banks were nationalised, it was the number one bank after State Bank of India but over the years it (has) slipped. The main reason was not enough attention to human resources. It is a bit of an old-age home. The average age here is 53.

ML: Why is Central Bank an exception, if they follow the same recruitment policies?

SS: Somewhere in the last 10-12 years, other banks realised this and took corrective action. Bank of Baroda, Canara Bank, Punjab National Bank - all did something about the skewed age profile, but Central Bank couldn't do it because of union issues, etc. A cardinal flaw was that Central Bank wasn't taking in direct recruits - that is why, in every category, there is hardly anyone below 50. This brings with it a set of issues - risk aversion; focus on family and refusal to be transferred away from the hometown. Also, there was no attention to work processes and practices. So that is my first priority. Technology and human resources are my top priority - in the process I have also restructured the bank by creating certain business verticals. I created corporate verticals and large corporate branches. Central Bank has always had a good relationship with customers and we also have several top customers, but over time, our share of their wallet had decreased significantly. The corporate sector has been a big thrust area - but they are good for the balance sheet but not the bottom-line which has to come from retail and SME (small and medium enterprises). SME has been good last year with 53% growth - that has to be maintained. Retail is going to be the big thrust area this year. In terms of technology, we have all the products in place - credit cards, debit cards, ATM cards, we are also ready with mobile banking, Internet banking, SMS alerts, etc. We now need to roll out what we have, but that is the challenge. We are rolling out ATMs in a big way, by 1st September (we) will have 900 and by December we will have 1,800 ATMs all over. By 30th June next year, we will have 3,000 ATMs in place. I think that is very important to attract young people and it is especially good for us, given the age profile. Getting younger people back is a priority, because they are the ones who have the money to spend. One thing in that direction is that we are official bankers to the Commonwealth Games; we want to bring the young, sporty image to the bank. We are also getting into our centenary year at the end of December.