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“Canara Bank’s
Strategy to Achieving
Competitive
Advantage”
- A Case on Canara Bank Turnaround
2 Scenario as on January 2013
1. Low Morale
2. Commitment levels missing – ‘Staff Indifferent’
3. Lack of Direction, Focus and No Support System
4. Environment of Fear and Apprehension
5. Growth was Negative or Stagnant while banking

industry was growing well
3 Scenario as on January 2013
6. No Incentive to contribute or perform

7. Only wholesale banking (procuring high cost
deposits & doing low-yielding advances) at top-
management level
8. No Efforts on Retail, SME and Priority Sector –
Agriculture
9. Recovery efforts were far and few
10.Disconnect between the management with the field
– other stakeholders
4 Deciding the Key Strategy Areas
1. Focus on Low-cost deposits – CASA
2. Retail Credit growth
3. Thrust on increasing Fee Income
4. Focus on Asset Quality Improvement – NPA

Management
5 Initiatives Taken to Implement
the Strategy
I. Focus on Low-cost deposit - CASA
1. The bank was predominantly in Southern India.
It was strategically decided to open more branches in

other parts of the country (1700+ new branches and
3750+ ATMs) for low-cost deposit mobilization to make
the bank pan-India
2. Recruited around 15000 new staff and addressed

shortage of staff – Average age of staff reduced from
50+ to below 40
the Strategy
 Focus on Low-cost deposit - CASA
3. By leveraging technology, various new products were

launched -
100 e-lounges were created at major centers with
 Cash dispensing
 Cash and Cheque deposit machines
 Free internet and passbook printing facility; thereby

implementing ‘Shikhar’ branch concept
Share of e-business went up from 30% to 60%

the Strategy
 Focus on Low-cost deposit - CASA
4. Empowered branch managers and marketing

officials by providing mobiles and laptops
thereby enabling faster communication and
centralized repository of contact information
the Strategy
 Focus on Low-cost deposit – CASA
5. Leveraged SLBC forum at Kerela & 2 Regional

Rural Banks at Kerela & Karnataka
5. A large share of Cash Incentive scheme was for

increase in CASA
the Strategy
II. Strategy to Increase Retail Credit,

MSME, Priority Sector – Agriculture
1. For increasing car loans, housing loans and
education loans
1. Tie-up were done with all the dealers, builders and
educational institutions and
2. Retail expo organized at around 40 centers to
showcase the products involving all staff for faster
delivery
the Strategy
Strategy to Increase Retail Credit,

MSME, Priority Sector – Agriculture
2. In MSME and Priority Sector lending,
the bank was below the national goals by

strengthening the verticals and through retail
camps, the national goals were exceeded
3. A huge weightage in terms of marks was given
for awarding cash incentive for achieving goals
the Strategy
III. Thrust on Fee Income
1. Marketing Vertical was created to cross-sell the

products and services of the bank to boost fee
income with the slogan –
‘One Life Policy and One SIP per employee’
the Strategy
 Thrust on Fee Income
2. Engaged Professional Experts of BCG &

KPMG for Business Process Reengineering
(BPR) and transformation of the branches to
delivery centers –
1. Launching ‘Project Shikhar’ with BCG; and
the Strategy
2. Turnaround plan of Optimum utilization of the 7
subsidiaries of the bank was launched with KPMG -
1. Canara HSBC OBC Life Insurance
2. Canara Robeco Asset Management Company (Mutual
Fund)
3. Canfactors Limited
4. Canfin Homes – A listed company
5. CanSecurities Limited – Depository
6. CanComputer Service
7. CanFinancial Services
the Strategy
3. Tie-up with non-life United India Insurance and

Apollo Munich Health Insurance to cross-sell
their products through the branches
4. A huge weightage in terms of marks was given

for awarding cash incentive for achieving goals
under fee income
the Strategy
IV. Strategy for Improving Asset Quality – NPA

Reduction
1. Strengthened Credit Monitoring from CMD to branch
manager level
2. Timely help and action by meeting borrowers in problem

by personal contact / video conferencing
3. Organizing recovery camps at branch / circle level
4. Lok Adalats
the Strategy
Strategy for Improving Asset Quality –
NPA Reduction
5. Mega CAN Adalats at district/branch/circle level
6. Regular Monitoring of Wilful Defaulters
7. Area-wise special OTS policies – For eg,
1. Tractors,
2. Mining (Goa, Mangalore, Bellary, Hubli)
the Strategy
Strategy for Improving Asset

Quality – NPA Reduction
3. Education Loans specially in Tamil Nadu and
Kerela where NPA was brought down from
8% to 4% through personal contact, one to
one by field and head office GM directly
the Strategy
Overseas Expansion
1. Strengthened existing branches at London,
Moscow, Shanghai, Bahrain and Sharjah
2. Opened new branches at New York and

Johannesburg to increase share of business from
overseas branches from 4.5% to 8%
19 Staff Motivation
1. Fortnightly Top Management Committee

(TMC) Meeting involving all senior
officers
2. Monthly communication to all the staff
3. Planned to visit all 34 controlling offices
20 Staff Motivation
4. Meeting all senior staff, addressing town

hall, meeting cross-section of customers,
meeting press and media for brand
building with the intent of –
 Removing fear / apprehension
 Reiterating strategic goal and get direct
feedback on operational issues
 Reassuring protection for bonafide decisions.
21 Staff Motivation
5. Established Reward System –

i. Implementing Cash Incentive Scheme
ii. Extended Non-Cash Incentives by
providing training to top performers in
India & Abroad at apex training /
educational institutions
22 Staff Motivation
iii. Created a Board approved policy for top five
branch performers in each circle to send abroad
for competency enhancement
6. Taking Union leaders who were board members
into confidence by starting a ‘Redressal
Grievance’ portal to address their issues

23 Tools used at Management Level
1. Planning
2. Open and flexible approach
3. Role of enabler, facilitator and problem

solver
4. Belief in people
5. Incentivize people – lot of promotions

and training at apex institutions at
India/abroad for better exposure and as a
reward
6. Empowered people
7. Used 5Ps –
 Products
 Price
 Place
 Promotion &
 People) in an effective manner

8. Brand building –
1. Visibility of the bank through press, media
increased;
2. Roped in Shikhar Dhawan as brand ambassador

9. The Bank had a tagline – ‘Together We Can’
An addition of ‘Together We Will’
was made
The bank received numerous awards as

recognition of the good work done by the
bank on the key performance areas
28
Thank You

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“Canara Bank’s

2. Commitment levels missing – ‘Staff Indifferent’

3. Lack of Direction, Focus and No Support System

4. Environment of Fear and Apprehension

5. Growth was Negative or Stagnant while banking

6. No Incentive to contribute or perform

1. Focus on Low-cost deposits – CASA

2. Retail Credit growth

3. Thrust on increasing Fee Income

4. Focus on Asset Quality Improvement – NPA

1. The bank was predominantly in Southern India.

It was strategically decided to open more branches in

2. Recruited around 15000 new staff and addressed

3. By leveraging technology, various new products were

100 e-lounges were created at major centers with

 Cash and Cheque deposit machines

 Free internet and passbook printing facility; thereby

Share of e-business went up from 30% to 60%

4. Empowered branch managers and marketing

5. Leveraged SLBC forum at Kerela & 2 Regional

5. A large share of Cash Incentive scheme was for

II. Strategy to Increase Retail Credit,

Strategy to Increase Retail Credit,

the bank was below the national goals by

III. Thrust on Fee Income

1. Marketing Vertical was created to cross-sell the

2. Engaged Professional Experts of BCG &

3. Tie-up with non-life United India Insurance and

4. A huge weightage in terms of marks was given

IV. Strategy for Improving Asset Quality – NPA

2. Timely help and action by meeting borrowers in problem

3. Organizing recovery camps at branch / circle level

Strategy for Improving Asset

2. Opened new branches at New York and

1. Fortnightly Top Management Committee

4. Meeting all senior staff, addressing town

5. Established Reward System –

ii. Extended Non-Cash Incentives by

providing training to top performers in

India & Abroad at apex training /

iii. Created a Board approved policy for top five

branch performers in each circle to send abroad

for competency enhancement

6. Taking Union leaders who were board members

into confidence by starting a ‘Redressal

Grievance’ portal to address their issues

2. Open and flexible approach

3. Role of enabler, facilitator and problem

5. Incentivize people – lot of promotions

 People) in an effective manner

1. Visibility of the bank through press, media

2. Roped in Shikhar Dhawan as brand ambassador

9. The Bank had a tagline – ‘Together We Can’

An addition of ‘Together We Will’

The bank received numerous awards as

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