Allahabad Bank Aims To Disburse Rs 2000 Crore Retail Loans

Allahabad Bank is looking at disbursing close to Rs 2,000 crore in retail loans this fiscal. The bank also intends to bring down its non performing assets (NPAs) to about 8 per cent from the current 10 per cent, a top official of the bank said.

Allahabad Bank executive director K K Rai said the bank was expecting to target disbursement of Rs 2,000 crore in retail lending towards personal loans, housing loans, educational loans, and loans against national saving certificates.

Retail sector lending has become a thrust area for most nationalised banks as margins are higher when compared with corporate lending. While foreign banks like Citibank and Standard Chartered have garnered a fair share in this segment, nationalised banks like State Bank of India are also looking at garnering a big share.

"We are looking at disbursing about Rs 1,000 crore through our retail banking boutiques. As of now, we have about 230 retail banking boutiques and we expect this to go up to 300 by the end of the year." Rai said. Another Rs 1,000 crore is expected to be disbursed through the bank's other branches.

Allahabad Bank has welcomed the recent RBI Ordinance enabling banks and lending institutions to proceed against 'wilful defaulters' as a step to reduce NPAs. Rai said the bank had consented to invest Rs 20 crore in the asset reconstruction company (ARC), which has been mooted by several banks and financial institutions.

Rai said the thrust would be to lend to entities involved in exports. The bank already has considerable exposure to the gem & jewellery exports industry and this focus is expected to continue.

"We are also looking at investing in infrastructure projects and have already disbursed Rs 75 crore for a road project in Karnataka, where the Industrial Development Bank of India is the lead banker," Rai said.

Credit offtake, according to Rai, had been poor in the first two quarters but it is expected to pick up.