Ujjivan Bank’s focus now on stability of portfolio, organisation

The future strategy of detailed in the annual report has just turned irrelevant.

While the bank had listed a slew of digital-centric innovations to increase product suite and improve customer outreach in its latest annual report signed by outgoing chief executive Nitin Chugh, the new management has put stability as its foremost priority, pushing everything else to the backburner for the time being.

The annual report said the bank plans to enhance its payments and ecommerce presence through fintech partners and scale up business segments such as gold loans, farm loans and loans to small and medium enterprises in FY22.

“Forget all that, our first focus is to stabilise the portfolio and the organisation,” a senior executive close to the current management told ET, in what could well be a reflection of the alleged conflict between the previous and current management.

Ujjivan founder and former managing director Samit Ghosh, who has been brought back on the bank’s board as an additional director, declined to comment.

Chugh resigned last month citing personal reasons. It is widely viewed that

, the holding firm for the bank, was unhappy with Chugh’s handling of asset quality following the pandemic-led stress. The promoter also expressed concerns over high attrition with several senior and middle-level executives leaving the bank.

The bank’s gross non-performing assets jumped to 9.5% at the end of June from merely 1% as of March 31, 2020. Attrition rate was nearly 20%.

Following Chugh’s exit, the group selected Carol Furtado, who was a founding member of Ujjivan Financial Services, as its interim chief executive. Chugh will officially leave the bank on September 30.

“We expect FY22 to be a year of reasonable growth and stabilisation as we retain our sharp focus on improving our earnings, maintaining a healthy portfolio quality with emphasis on digitisation that would enhance our diverse product offerings,” Chugh said in the annual report for FY21.

The bank’s digitalisation process gained steam during his two-year stint.

“Going forward, we aim to strengthen our end-to-end process digitalisation efforts and use the power of digital as a new customer acquisition and service channel,” the bank said in the annual document for shareholders. “We will also leverage the power of analytics for actionable insights for data-driven decision making. We will continue to leverage our full-stack API banking platform to partner with the fintech ecosystem for faster time to market and innovative products and solutions for our customers,” it said.

While the first half of the financial year for Ujjivan went by navigating through the pandemic-led crisis compounded by the second wave, the next three-to-four months would be invested in bringing stability at the board and the management level. Several board members including chairman B Mahapatra Mona Kachhwaha, Ittira Davis and Harish Devarajan had left over the past few months.

The new management would also focus on an imminent reverse merger in the next few months. The bank, which completes five years of operations on January 31, 2022, is allowed by the Reserve Bank of India to reverse merge itself with the holding company.

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