Public sector Indian Bank has planned to expand its network of microfinance branches in the country.

From the current count of 32, the bank targets to increase the network strength to 60 by the end of March 2012.

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“We had launched the microfinance branch initiative in 2007 and it has been highly successful with recovery percentage of 99.5 per cent,” Indian Bank CMD T M Bhasin told Business Standard here.

Since inception, the initiative had reached out to about 400,000 SHGs comprising 5 million people in the country and extended collateral-free loans totalling Rs 2,130 crore.

The Bank plans to launch two such branches in Amethi and Rae Bareli in Uttar Pradesh for SHGs functioning under Rajiv Gandhi Foundation, he informed.

Bhasin was in town to inaugurate the bank’s 69th branch in Lucknow region. Another 10 branches are located in the National Capital Region (NCR) of the state.

“By March 2012, we plan to ramp up our branch network in Uttar Pradesh and Uttarakhand to 100 and increase our total business to Rs 7,500 crore in the region from Rs 5,000 crore currently,” he added. A new zonal office will be opened in Meerut to cater western Uttar Pradesh and Uttarakhand.

The Micro, Small and Medium Enterprises (MSME) and agricultural credit growth posted by bank had been 34 per cent and 26 per cent, respectively.

On the need for capitalisation, Bhasin mentioned the bank’s capital adequacy ratio was in comfortable territory.

“Our capital adequacy ratio stands at over 12.76 per cent, while the Tier-I capital adequacy ratio is 10 per cent. At the end of the current quarter, our capital adequacy ratio is likely to increase to 14 per cent,” he noted.

The bank, which has 2/3rd of its network based in South India, primarily Tamil Nadu and Andhra Pradesh, will open more branches in the North to have equal footprint across India.

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