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Three banks propel Thrissur into the 21st century

Three banks propel Thrissur into the 21st century

Every year, hundreds of thousands of people converge on Thrissur, Kerala, for its spectacular temple festival. But Thrissur is remarkable also for another reason: this city of 400,000 people is the only small town in India that is home to three private-sector banks.

Every year in April or May, hundreds of thousands of people converge on Thrissur, Kerala, for its spectacular temple festival. The event, famous for its gathering of some 50 elephants, is held in the ancient Vadakkumnathan temple in the heart of the city, and attracts visitors from around the country and the world.

But Thrissur is remarkable also for another reason: this city of 400,000 people is the only small town in India that is home to three private-sector banks. And while 'Thrissur Pooram' anchors the town in ancient tradition, its banks have propelled it into the 21st century. Born in the 1920s out of concerns that would be considered narrow by today's standards, all three banks have outgrown their founders' business rivalries and risen above sectarian concerns.

PHOTO: Deepak G Pawar
The headquarters of the banks - Catholic Syrian Bank (CSB), Dhanlaxmi Bank and South Indian Bank (SIB) - are all within a couple of kilometres of each other. Today, the bulk of their total business of Rs 1 trillion (a trillion equals 100,000 crore) comes from outside Thrissur district.

In fact, there were four banks in the area. "If you take Thrissur district as a whole, we had another bank - Lord Krishna Bank," says V.A. Joseph, Managing Director and CEO of SIB, the youngest and largest of the three. Lord Krishna Bank was acquired by Centurion Bank of Punjab in 2006, which itself was bought out by HDFC Bank two years later.

VIDEO: The core values driving Dhanlaxmi Bank

With large public- and private-sector rivals in Kerala - the State Bank of Travancore has 925 branches and 955 ATMs, and Federal Bank has 1,010 branches and 1,100 ATMs - Thrissur's banks need to be nimble. An example is CSB's popular mobile ATM service. Driver-cumoperator Jeeson Palayoor takes his ATM van to about a dozen locations daily.

"We dispense up to Rs 4 lakh a day," he says. On salary day, his van stops at educational institutions and business establishments, so employees can withdraw cash easily. In addition to regular ATMs, CSB has mobile ones like this in five other locations in Tamil Nadu and Kerala. Even the head of a rival bank says the mobile service is innovative.

CSB, the oldest of Thrissur's three banks, started in 1920, at the initiative of influential members of the local Christian community. Bankers say that the town - which then had a bustling trade in farm commodities - had a number of kuries or chit funds. Even banks ran such schemes until the late 1970s. Some of these chit funds even issued loans against collateral. A formal banking system was the next logical step.

VIDEO: Catholic Syrian Bank focusing on service differentiation

CSB could perhaps have met local financial needs alone, but its success spurred others to banking. Dhanlaxmi Bank was started in 1927 by Brahmins with the aim of supporting their community. Two years later, SIB was started by a group of 44 influential local traders who pitched in Rs 500 each.

Bankers say SIB started because some of its founders could not get a role in the other two banks. Today, of the three, SIB has the swankiest corporate office. It is also the most visible outside Kerala, as it has roped in Malayalam superstar Mammootty as brand ambassador. At the end of September, 330 of its 731 branches were outside Kerala.

Goddess willing: The headquarters of Dhanlaxmi Bank (PHOTO: Deepak G. Pawar)

Dhanlaxmi Bank, named after the goddess of wealth, may have got a brand makeover and a trendy new logo two years ago, but religion is an important part of business in many ways. The chief priest at Kerala's famous Guruvayoor temple is an employee of the bank. Dhanlaxmi Bank handles the accounts of over 3,000 temples and hundreds of churches in the state. It is exclusive banker to the famous hill shrine of Ayyappa at Sabarimala, which gets about 60 million devotees a year and had annual revenues of about Rs 114 crore last year

"We are God's own bank in God's own country," says Jayakumar P. G., Managing Director and CEO, and a devotee of Mata Amritanandamayi, a spiritual leader from Kerala's Kollam district. The state's temples have annual revenues of about Rs 1,000 crore - some five times those of its 42 public sector undertakings.

Dhanlaxmi Bank's corporate office is in a 50-year-old building, but a swanky new one is under construction. As part of its makeover in 2010, the bank changed its spelling from the more typically South Indian "Dhanalakshmi" to "Dhanlaxmi".

Jayakumar says: "Like Adi Sankara, who was born in Kerala and carried out his activities across India, we are spreading ourselves outside Kerala." In May 2011, Infosys co-founder Nandan Nilekani bought a 1.17 per cent stake in Dhanlaxmi Bank.

Each of the three banks has different strengths. SIB's strengths are gold loans, which accounted for nearly 19 per cent of advances in 2011/12, and large-scale industries such as food and power, which accounted for another 16.5 per cent. Sixty per cent of Dhanlaxmi Bank's business comes from retail, and it is also a big player in microcredit in Kerala. CSB's strengths are catering to retail clients and small and medium businesses.

VIDEO: The journey of South Indian Bank

Growth rates are healthy. For example, CSB's business has more than doubled in the past three years. SIB's business has almost trebled in five years to Rs 67,500 crore as on September 30 - a compound annual growth rate of 26 per cent.

Without a cosmopolitan approach, growth would not be possible. For years, Dhanlaxmi was identified with the Brahmin community, and CSB with Christians. But that has changed. Catholic Syrian Bank goes by CSB, rather than its full name, says local businessman Bhavadasan Kothappally, who owns the K.P.Namboodiri's brand of oral care products.

The sign at the bank's headquarters on Thrissur's St. Mary's College Road says "CSB" in large letters, and the full name appears in small type. "We are a bank for all communities, says V.P. Iswardas, Managing Director and CEO. "The C in CSB stands for customer." He adds with a smile that CSB stands for "customer service at its best".

Christians are no longer the majority shareholders of CSB. The biggest shareholder is Sikh - the Thailandbased family of Sura Singh Chansrichawla, with a stake of about 18 per cent. Only seven of the bank's 16 CEOs so far have been Christians

SIB's Joseph says: "The fact that our founders named the bank South Indian Bank shows their vision to make it a bank for the entire South India, and not just Kerala."