Karnataka Bank Sets Up Risk Panel, Plans Debit Card

Private-sector Karnataka Bank plans to launch a host of banking products including debit cards with credit facility.

Chairman and managing director Ananthakrishna said at the annual general meeting that the introduction of debit cards will be carried out by setting up ATMs in select centres.

"Multi-branch banking is under implementation at select branches, while the flexi-deposit facility, under which balances in savings banks accounts above a specified limit will automatically be transferred to a term deposit account yielding higher rate of interest to the customers, too is being offered," he said.

Ananthakrishna said a dividend of 45 per cent for 2000-01 has been approved for the fourth straight year by the board. While the earnings per share (EPS) works out to Rs.33.67, the book value per share of Rs. 10 face value, stands at Rs.259.43.

The per employee business turnover has increased to Rs.210.28 lakh from Rs.177.68 lakh, registering a growth rate of 18.35 per cent. The profit per employee touched Rs.1.11 lakh. The bank has over 4,000 employees.

Ananthakrishna said 148 branches have been wholly or partially computerised for speedier work flow and better customer service, while some of them have been networked to the data centre in Bangalore, enabling centralised processing and retrieval of business data.

Ananthakrishna said an integrated risk management committee has been set up to assess and manage the business risks and assets and liabilities of the bank. The bank plans to achieve a total business of Rs.11,000 crore by March 2002.

Ananthakrishna said gross incomes of the bank increased to Rs. 743.37 crore, recording growth of 14.3 per cent compared with the previous year's level. Of this, non-interest income rose by 23.8 per cent to Rs. 89.48 crore. The operating profit rose substantially by 68.38 per cent to reach Rs 136.07 crore. The net profit stood at Rs. 45.41 crore. The net owned funds was Rs.349.88 crore with capital adequacy ratio of 11.37 per cent , above the stipulated requirement of 9 per cent. Despite competitive conditions and the consequent pressure on interest margin, the interest spread of the bank improved to 2.17 per cent from 1.68 per cent last year.

While deposits grew at the rate of 17.42 per cent to Rs. 6,075.50 crore, advances also rose by 15.37 per cent to Rs.2,828.22 crore, in spite of the sluggish credit off-take. Investments stood at Rs.2,787.01 crore, registering an increase of 35.11 per cent. Forex turnover in terms of imports, exports and remittances amounted to Rs.3019.46 crore. The bank's branch strength grew by 7 to 354, he said.