Bank to moderate credit growth

After almost doubling its loan book in just two-and-a half years, Punjab & Sind Bank (P&SB) is shifting to a lower gear to consolidate business and focus on improving efficiency and the share of low-cost deposits.

From Rs 18,409 crore at end of March 2008, the bank has grown its outstanding advances to Rs 35,896 crore at end of September this year.

“The growth has been much ahead of industry average. Now, we will moderate the pace of credit expansion. If industry grew by X per cent, P&SB credit rose 1.5-1.75 times industry growth. Now we will grow the loan book by 1.2-1.25 times. Much of the credit growth will be funded by low-cost deposits”, Executive Director P K Anand said today.

Another senior official said the Delhi-based public sector bank had compromised on some efficiency parameters like the share of low-cost deposits while growing loan book. Now, it was looking at correcting the same.

None of the officials was ready to elaborate on the growth target as the bank was planning an initial public offer to mop up Rs 470 crore.

The share of current and savings account deposits (CASA) slipped to 25.14 per cent at end of September, as against 36 per cent in March 2008.