Catholic Syrian Bank easing out officers en masse

The Catholic Syrian Bank (CSB), the financial institution that boasts about nine decades of banking history in Kerala, has moved to ease out or extend probation of more than 80 trainee officers in one stroke by serving show cause notices on completion of their probation period of two years as on January 16, 2018.

While about 20 officer trainees have been asked to show cause as to why they shall not be removed from their job, the rest of the 80 odd trainees were served notice for extending their probation. According to union leaders, who spoke to, the latest move is unheard of in the state’s banking history and is expected to meet with resistance.

The bank letter signed by the HRD head has clearly said that these trainees failed to meet the target sought from them in their performance.  Though the trainees were said to have been paid Rs40,000 as monthly remuneration, the bank has charged more than Rs40,000 for their training.
Catholic Syrian Bank (CSB) has made many a headline in the past couple of years, the first being when the Thailand-based NRI businessman Surachan Chawla bought a substantial stake in the bank in the early nineties followed by the Catholic Church entering the fray to dilute Chawala’s holding by offering to buy a big chunk from him.

The latest noise was made in December 2016, when the Canadian investment firm Fairfax Financial Holdings Ltd was almost set to buy a 51 per cent stake in CSB, but with voting rights not exceeding 15 per cent.

Unfortunately, the deal fell through for want of consensus on valuation between the CSB management and Fairfax. The bank management said that they were in talks with other prospective investors including a couple of private equity firms.

The bank has been without a proper growth direction, which is testified by the fact that the asset growth during the last six months ending September end, 2017, was negligible.

The bank posted a loss of Rs13.13 crore for the six month ending September 30, 2017 (latest available results) against Rs53.17 crore net profit for the corresponding period last year.

The capital adequacy ratio at just over 11 per cent constricts the growth potential for the bank. While the gross NPA stands at 6.75 per cent, the net NPA is at 4.73 per cent as on September 30, 2017.

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