Melwin Joy
AUTHOR

Melwin Joy

All stories by: Melwin Joy
M.G.George Muthoot – A Dynamic Banking Specialist

The winner of the “ Business Leader of the Year Award – 2014” instituted by ‘Cochin Herald’, and Chairman of Muthoot Group M.G. George Muthoot, is a well known and dynamic Banking Specialist in India as well as the 50th Richest Man in the country. Apart from being an Expert in Financial Management and Business Development, he is a Social Worker and Educationist as well and all these qualities which are inborn in M.G. George Muthoot is very much evident from the tremendous development that had been taking place in the Muthoot Group.

It is his dynamic leadership qualities and the cutting edge character of opening new vistas for development that brought him to such a high stature. Had he not taken charge as Chairman of this single largest Group of Financial Institutions, Perhaps, the Muthoot Group too would not have scaled the heights of the Banking Industry to such an extent. M.G. George Muthoot is the winner of a large number of prestigious awards at the state as well as national level for his contributions to the society and the nation.

It was in 2011, that the Forbes Asia Magazine listed him as the 50th richest man in India. Other major awards that he has won include the ‘Maulana Jamil Ilyas Excellence Award’ for his contribution in developing financial services, ‘Golden Peacock Award for Excellence in Corporate Governance’, ‘Golden Peacok Award for Business Leadership’, ‘Mahatma Gandhi National Award’ for Social Service, ‘Businessman of the Decade Award’ by World Malayali Council and Life Time Achievement Award for his outstanding contribution to business among others. The Muthoot Group too has been conferred with various awards and accolades including “Golden Peacock Award for HR Excellence’, ‘Intelligent Enterprise Award for IT Innovation Award’, from the Express Group and ‘ The Dhanam Businessman of the Year 2012’.

To run the business as a Responsible entrepreneurship – in a way that enhances the positive contributions to society, whilst minimizing negative impacts on people and the environment. M.G. George Muthoot has been a firm believer in Corporate Social Responsibility and a practitioner of its principles which were refined and developed over decades. His CSR mission “to constantly give back to the community by identifying and facilitating growth in areas which are less privileged” is reflected through its Healthcare and Education division that have been working on a ‘No-Profit No- Loss’ basis since its inception. He has been working extensively to address the needs of the exploited customers and has made them part of the organized sections of the society. The initiatives taken by him to venture into the remotest areas of India has saved the rural and urban lower strata of society from the clutches of local pawn brokers and money lenders who were exploiting them. On the other hand , the efforts have helped the company also in three ways :

  1. It has successfully transformed the unorganized sector to an organized sector and saved the rural masses from the clutches of local money lenders;
  2. Brought credibility to the gold loan business.
  3. It included thousands of rural and semi-urban Indians into the banking net for the very first time.

The company was started by late Ninan Mathai Muthoot as a small trading business at a remote village Kozhencherry in Pathanamthitta District of Kerala in 1887, the Muthoot Group was engaged in wholesale trading of grains and timber to large British run plantations.

It was in 1939, when the baton was passed on to M.George Muthoot, that he took the courage to enter into Banking and Financial Services. Ever since then, the Group doesn’t have to look back even once, M.George Muthoot, realized that India is the largest consumer of gold in the world and majority of the population are unaware of organized banking or financial services; Thus, M.George Muthoot, introduced the concept of ‘Gold Loan’, realizing the inadequacies of banking facilities for the masses who contribute a huge number in India.

It was in 1979 ,when M.G.George Muthoot, Chairman, took over the reins of business, that he took the legacy of the family business to greater heights. With over 126 years of standing, the Muthoot Group today, has spread its wings to almost all the important fields of business. The Muthoot Group has established itself as a business empire comprising of 16 divisions including Financial Services, Education, Healthcare, Money Transfer, Foreign Exchange and Wealth Management. The other diversified fields to which it has entered include : Housing & Infrastructure, Information Technology, Leisure & Hospitality, Power Generation, Media, Travel Services, Plantation & Estates, Vehicle and Asset Finance, Securities and Precious Metals. Muthoot Finance, the flagship company of the group has more than 74 years of trusted Financial Services. It has a network of over 4,400 branches and bank ready infrastructure, the Muthoot Group has a dominant presence in 21 states, 4 Union Territories , 1072 cities, 364 districts and 1240 taluks. Of this 70 % of its branches are in rural and semiurban areas.

Through its commitment and dedicated service, the Muthoot Finance Ltd., which is one of India’s largest gold financing company, has become one of the first-ever Non-Banking Financial Company(NBFC) to receive an ‘In principle Authorisation’ from the Reserve Bank of India (RBI) for settingup White Label ATM’s (WLA’s) in the country

As per the company’s Corporate Sustainability Report for the year 2011- 12’, the success of Muthoot Group is derived from its identification of the symbiosis that exists between business and communities and its adoption of a ‘Quadruple Bottomline’. This Quadruple Bottomline approach enhances the value of customers, employees, society and the economy.
M.G.George Muthoot’s charity division, the ‘Muthoot M George Foundation’ has conducted many CSR initiatives that have highlighted awareness in areas of environmental development, projets of public interest, relief and rehabilitation and socioeconomic development of the poor and the lesser privileged.. In fond memory of its former Executive Director Paul M George, the Muthoot Group has launched ‘Paul George Memorial Tournament’ in 2012. It has been designed as a sports platform, aiming at providing the marginalized children of government-aided schools an opportunity to showcase as well as to develop their sporting abilities by being trained under renowned coaches at the St. George Sports Academy. The Group also encourages further education by awarding educational scholarship to the best players of the tournament. The M.G. George Muthoot Group plays a prominent role in the Economic Development of India. The company’s revenue stood at INR 5387 crore during the financial year 2012-13. The profit after tax grew from INR 494 crore during the financial year 2010-11 to INR 1004 crore during 2012-13. The inward remittances of business from April 2012 to the September 2013 was INR 6171 crore with 100 % compliance where 75 % of the customers were from GCC countries. The foreign exchange business of the company also stood at INR 442 crore during the financial year 2012-13.

The Muthoot Group has systematically organized its gold loan financing process through initiatives like Financial Inclusion, Revolutionizing Gold Banking, Rural presence and Digital Inclusion The Company has established contributed significantly to the country’s overall economic growth and GDP. It has also increased the company,s market share in the gold loan sector by 20 per cent. It is also the first Non-Banking Financial Company to take pioneering efforts in marketing loans against gold with least hassle and documentation and provide ‘Gold Loan in 5 minutes’. The company with prompt staff services also provide its customers with immediate financial assistance for their personal or business purposes. The Muthoot Group has been a forerunner in leveraging the power of IT and has been infusing IT in all its operations to improve its customer service, efficiency and management information systems. The strategy was intended to provide the customers a centralized, online and real-time transaction processing capabilities with enhanced convenience and a much better control of operations, MIS and risk management to its staff. With over 4,400 branches spread across the length and breadth of the country, the Muthoot Group has been catering to the needs of the am aadmi across semi-urban and rural areas for more than seven decades. The massive branch operations effected by the company has given way to the creation of more employment opportunities directly (staff recruitment) and indirectly (construction and labour involved insetting up branches) in Tier II, III, IV, V and VI cities. Direct staff recruitment of the company involved son of the soil ( recruitment of local people) so that the customer feels at ease with people of his region.

The Muthoot Group led by its Chairman M.G. George Muthoot has taken several welfare measures for their staff. The Group has tied up with the Indian Institute of Banking & Finance (IIBF), in a bid to encourage its staff to upgrade their professional skill through Junior Associate of Indian Institute of Bankers (JAIIB) and certified Associate of Indian Institute of Bankers (CAIIB) courses. This would benefit the staff at the time of increments, Those who clear the courses are not only enabled to get substantive increments, but also the expense born by the staff for the courses is also reimbursed by the company. The Group also creates an upwardly mobile career path for each staff through the fast-track promotions where an executive grade employee can reach the position of a Branch Manager in two years. .The Fast Track promotion has encouraged professional growth in Junior and intermediate staff and addressed their ‘career concerns’. It has also initiated certain Social Security measures for the welfare of the staff which include contributions to the contribution to Employees Provident Fund Organization in respect to Provident Fund, Pension Fund and Employees Deposit Linked Insurance scheme at the prescribed rates and are charged to profit & Loss Account at actuals. The company also makes annual contribution to a Gratuity Fund. Yet , another welfare measure taken by the Muthoot Group for the employees is the introduction of Employee Stock Option ESOP’s.

It is an opportunity given by the company to its employees to own a certain number of shares of the Company’s common stock at a preestablished price known as grant price over a specified period of time known as the vesting period. The ESOP’s will enable the employees to share the ownership of the company, encourage the employees to aspire for promotions for taking up higher responsibilities, help them for their wealth creation over a period of time while serving the institution, retain the company’s talented work force and to attract quality candidates to the organization. It is also intended to motivate the employees and to ensure enhances employee loyalty and opportunity for employees to reap the fruits of the prosperity of the organization among others. The Muthoot Group: A Business Conglomerate and Financial Leader The Muthoot Group which commenced operations in 1887, has an unblemished track record, trust and business experience. Under the stewardship of M.G.George Muthoot, Chairman and the driving force behind all its achievements today, the Group has become one of India’s leading business conglomerates. The Chairman of the Group, M.G.George Muthoot has always strived.

Melwin Joy
AUTHOR

Melwin Joy

All stories by: Melwin Joy