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| Vijaya Bank aims to up credit 23% |
| BS Reporter / Chennai/ Bangalore May 01, 2010, 00:20 IST |
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The Bangalore-based public sector lender, Vijaya Bank, aims to achieve a 23 per cent credit growth with greater emphasis on retail sector lending during the present fiscal. Credit growth in the last fiscal stood at 17 per cent due to the subdued demand for credit.
“We hope to see a 23 per cent credit growth during the present fiscal and have already witnessed encouraging signs of demand in the last two quarters,” Albert Tauro, CMD, Vijaya Bank said.
The focus of the bank will be on the retail segment, especially on home and education loan, to drive credit growth, he added.
The bank, which had a provisioning of Rs 355 crore during the last fiscal, is also looking at asset quality for improvement in the net interest margin.
“In corporate lending, we are looking at better asset quality before any exposure, Tauro added.
The bank will tread cautiously before lending to some of the sectors like commercial real estate, he added.
Referring to the provisioning for daily calculation of interest rate on savings account, he said, “The total amount after daily calculation of interest rate on savings account will be Rs 80 crore for this financial year and will have a 12-13 basis point impact on our operating margins.”
The Reserve Bank of India, recently, asked banks to calculate interest rates on savings account on a daily basis, effective April 1, 2010.
Referring to current account and savings account (CASA) growth, Subhalakshmi A Panse, executive director, Vijaya Bank said the bank had witnessed a 20 growth in CASA and would expect to maintain the momentum. The bank also plans to enter the insurance business in this quarter.
“We have got the board’s approval to enter insurance business on a referral basis. We have tied up with the Life Insurance Corporation of India (LIC) for life insurance and with United India Insurance Corporation for general insurance space,” Tauro told Business Standard.
Vijaya Bank, which received Rs 500 crore as part of the government’s capital infusion measure, expects to receive another Rs 700 crore soon.
“We expect to get another Rs 700 crore capital from government in May, which will help us strengthen our tier-II capital base in the long-term,” Panse said.
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