Central Bank to cut lending to aviation sector

The bank's NPA climbed to 5.63% as on December 2012, and it plans to bring it down to 3.5% by March-end

Taking a grim view of the slippages on its credit to the aviation sector, Mumbai-based Central Bank of India has decided to curb lending to the sector.

“We have recorded the highest slippages in the aviation sector. Our exposure to the sector stood at Rs 3,000 crore. Our NPA (non-performing asset) in the sector stood at Rs 455 crore. We are curbing lending to the sector,” said Malay Mukherjee, executive director, Central Bank of India, who was on a two-day visit to Odisha.

He, however, refused to divulge the amount the bank’s exposure to the ailing Kingfisher Airlines.

The bank’s NPA climbed to 5.63 per cent as on December 2012, and it plans to bring it down to 3.5 per cent by March-end. The state-run bank, which has already clocked a business of Rs 3.77 lakh crore by December 2012, is eyeing business of around Rs  4 lakh crore in FY13 with a profit of around Rs 1,000 crore.

Before the end of the current financial year, the bank plans to open three more branches at Nuapada, Barbil and Darlipalli. It also plans to open a new regional office in western Odisha’s Sambalpur district by April.

At present, it operates with a single regional office in Bhubaneswar with a network of 94 branches across Odisha. The bank recently opened its first representative office at Nairobi.