Catholic Syrian Bank

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The Catholic Syrian Bank Limited
Type Not Listed
Industry Financial
Commercial banks
Founded 26th November 1920 at Thrissur, Kerala, India.
Headquarters Thrissur, Kerala, India
Key people V.P. Iswardas, Chairman
Employees 2791 (2007-08)[1]
Website www.csb.co.in

Catholic Syrian Bank Limited is a private sector bank situated in Thrissur City of Kerala state in India. Catholic Syrian Bank has 383 branches, and over 194 ATMs, and a net profit of Rs 36.56 crore in 2007-08 on revenues of Rs 50 crore.[2] Catholic Syrian Bank has a strong presence in rural India and around 80% of the bank’s branches are located in the semi-urban and rural areas of India.

Contents

History [edit]

The Catholic Syrian Bank was founded on November 26, 1920 in Thrissur city and commenced business on January 1, 1921 with an authorised capital of Rs 5 lakhs and a paid up capital of Rs 45,270. In August 1969, the bank was included in the Second Schedule to the Reserve Bank of India Act 1934. In 1975, the bank attained the status of "A" Class Scheduled Bank when its total deposits crossed Rs 25 crores.[3]

Introduction [edit]

The genesis of Indian banking is associated to a large extent with Swadeshi movement, which inspired many Indians to promote Swadeshi banks in the beginning of the 20th Century. Catholic Syrian Bank was established on 26 November 1920 at Thrissur, which in later years acquired the unique distinction of being a centre with the highest concentration of banks in the South. The founder directors of the bank were people of eminence known for their foresight, integrity and initiative. The policy they laid down has been consistently upheld by the successive generations who guided the destiny of the institution. The bank commenced business on 1 January 1921 with an authorised capital of Rs.5 lakhs and a paid up capital of Rs. 45270.

During its first two decades, Syrian Catholic operated only in Kerala. Banks and credit institutions which proliferated especially in Kerala received a jolt and many of them came to their doom following the crash of the Travancore National Quilon Bank in 1938 followed by Palai Central Bank in 1960. During the period many small banks came to the verge of collapse shaking the confidence of the public and what followed was a process of consolidation. The strategy of mergers and amalgamations of small banks with bigger banks brought the number of banks within controllable limits, thereby making the industry's base strong. In 1964-65, Catholic Syrian Bank took part in taking over the liabilities and assets of five small/medium sized banks in Kerala. The expansion programme initiated during these years gathered momentum in the subsequent years.

In August 1969, the Bank was included in the Second Schedule to the Reserve Bank of India Act 1934. In 1975, the Bank attained the status of "A" Class Scheduled Bank when its total deposits crossed Rs.25 crores. The necessity of imparting training to staff looked very important and a modest beginning was therefore, made in setting up a Training College in 1975. In the same year the Bank entered the field of foreign Exchange. At a very early stage, the Bank recognised mechanisation as an effective tool of management and streamlined its accounting procedures by introduction of Data processing system. From November 1975, reconciliation of inter-branch accounts was mechanised by using IBM Data processing machines.

The decade of the seventies saw the evolution of a new culture in Indian Banking. Nationalisation of banks imposed "Social Control" and imparted new ethos to commercial banking. What followed was a massive expansion of bank branches with a distinct thrust on remote rural belts. Special schemes were formulated to cater to the diverse credit needs of small scale industries, road transport operators, agriculturists,and other self employed entrepreneurs.

Catholic Syrian Bank did not lag behind in taking up the challenge and more than 75% of its clientele belong to small and economically weaker strata of Society. The bank has a strong rural base with around 80% of the branches in rural and semi- urban areas.

At present, the bank has a network of 364 branches which includes NRI/SSI/Industrial Finance and Service branches. The Bank also plans to open more number of branches in a phased manner.

Merger with Federal Bank [edit]

Aluva-based Federal Bank in 2008 has proposed the merger with CSB. The other largest shareholder in CSB is Thailand-based NRI, Surachan Chawla with a 21% stake. After the Reserve Bank of India’s mandate to bring down his stake to 10% per cent, Chawla reduced his exposure to 21% in 2008 from 34 per cent in 1994. While Federal Bank and L&T hold 5% each, a group of local investors hold close to 14%, the Mauritius-based AIF Capital India owns 15%, Edelweiss has 2% and the rest is held by the public. Chawla has also agreed to sell his stake to Federal Bank, but the value is not known. Chawla and AIF Capital Development have one man each on the eleven member board.[4] Federal Bank had mandated KPMG to conduct a financial due-diligence in September, 2009 to consider the merger proposal between the banks. It is learnt that KPMG valued CSB at a little over Rs 400 crore, on the basis of which Federal Bank made an offer. In 2010, official in the CSB close to the development said that any hopes of a merger can be given a burial after due to differences over valuation.[5]

Opposition to the merger [edit]

The merger of the Federal Bank and Catholic Syrian Bank (CSB) had been opposed by the Syro-Malabar Catholic Archdiocese of Thrissur. The church had been opposing the move, saying that the regional identity of the bank would be lost due to the proposed merger. In particular, the Archbishop of the Syro-Malabar Catholic Archdiocese of Thrissur Mar Andrews Thazhath had vehemently opposed the merger. All the political parties had also supported the church’s views as it has a big hold among the electorates of the central districts of Kerala. Earlier, the Catholic Church even mooted a proposal to purchase the shares owned by Surachan Chansri Chawla, a Bangkok-based Indian businessman who holds a 23 per cent stake in CSB, in order to have more say in the bank.[6]

A “CSB Protection Committee”, which has Archbishop of the Thrissur as patron, has been formed to oppose the merger with the Federal Bank. The committee said that any attempt to merge CSB with any other bank would be resisted. It added that to ensure that “the bank which is dear to the people of Thrissur retains its identity, it will line up investors to buy CSB shares. The church has in the past opposed a takeover of CSB; in the mid-’90s when Surachan Chawla bought a stake of about 38%, the church, led by then bishop Joseph Kundukulam, had said any attempt to take over the bank had to be opposed.[7] In February, 2010, the Syro-Malabar Catholic Archdiocese of Thrissur raised around Rs 250 crore from NRI investors from the state to buy a substantial stake in the bank. This amount would be used to buy around 30% stake in the bank. If the church manages to buy the stakes of Chawla and the Mauritius-based PEs, it would enable the Christian community to ensure an indirect control on the management of the Catholic Syrian Bank. The Church already enjoys a significant control over the bank through various investors, who would stand for community’s interest.[8]

Sura Chansrichawla controversy [edit]

In 1994, Sura Chansrichawla, Chairman of the Bangkok-based Siam Vidya Group, had acquired 36.18 percent equity of Catholic Syrian Bank. However, the shares were not transferred to the group consequent on objections raised by the Reserve Bank of India. Subsequently, the Supreme Court had directed the RBI to grant permission for the transfer of shares to the Group subject to the conditions that the Group should divest 26.18 percent shares, after retaining about 10 percent with it, on or before August 1, 2008.[9] Following the directions of the Supreme Court, the Group divested a little over 11 percent shares and for the transfer of 15 percent shares in excess of 10 percent permitted to be held by the Group, extension was obtained from the RBI till March 31, 2010. The group transferred the 15 percent shares of the Catholic Syrian Bank to a group 15 persons settled in Thailand.[10]

Core Banking [edit]

      • Catholic Syrian Bank has chosen Sun Microsystems to implement its core banking solution (CBS) that will help customers access the bank’s services through the branches, Website and ATMs (automated teller machines).[11] CSB will Rs 40 crore on the solution, which includes hardware, software, application and network. The centralised banking solution (called Maarvel) was developed jointly with Laser Soft, a Chennai-based company. Sun has provided servers and storage devices and Wipro is the system integrator.).[12]

Board of directors [edit]

  • VP Iswardas - Managing Director & CEO
  • Ajay Lal
  • S Swaminathan
  • Prakash G.Tole
  • CF John
  • Jos C Chakko
  • CKGopinathan
  • NR Achan
  • S Santhanakrishnan
  • Rakesh Mathur
  • G Sreekumar
  • K Ipe Peter
  • TS Anatharaman
  • Sumeer Bhasin[13]

References [edit]

  1. ^ http://www.sun.com/customers/service/csb.xml
  2. ^ "Genesis". Catholic Syrian Bank. Retrieved 2010-02-15. 
  3. ^ "Genesis". Catholic Syrian Bank. Retrieved 2010-02-15. 
  4. ^ "Federal, Catholic Syrian Bank merger plans hit valuation wall". The Economic Times. 2010-01-08. Retrieved 2010-02-17. 
  5. ^ "Federal, Catholic Syrian Bank merger plans hit valuation wall". The Economic Times. 2010-01-08. Retrieved 2010-02-17. 
  6. ^ "Federal-Catholic Syrian Bank merger in final lap". Business Standard. Retrieved 2010-02-17. 
  7. ^ "Federal Bank attempt to acquire Catholic Syrian Bank riles church". livemint. Retrieved 2010-02-17. 
  8. ^ "Thrissur Church raises Rs 250 crore to buy Catholic Syrian Bank stake". The Economic Times. 2010-02-17. Retrieved 2010-02-15. 
  9. ^ "Chawla submits share transfer applications". Express Buzz. Retrieved 2010-03-30. 
  10. ^ "Chawla submits share transfer applications". Express Buzz. Retrieved 2010-03-30. 
  11. ^ "Customer Snapshot: Financial Services". Oracle. Retrieved 2010-02-17. 
  12. ^ "Catholic Syrian picks Sun Micro tool for". The Hindu. Retrieved 2010-02-17. 
  13. ^ "Board of Directors". Catholic Syrian Bank. Retrieved 2010-03-03. 

External links [edit]
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