Oriental Bank reschedules loans worth Rs 1,082 cr

The Oriental Bank of Commerce (OBC) has rescheduled advances to the tune of Rs 1,082 crore to avoid non-performing assets (NPA), which at present is 0.76 per cent, the bank’s CMD Alok K Misra said today.

He said the process of rescheduling of advances was as per the Reserve Bank of India guidelines.

On why the rate of interest on deposits was not curtailed despite steep reduction in inflation, which stood at 3.36 per cent of the week ended February 14, Misra evaded a direct reply and said the government’s aim behind cut in CRR and repo rate was to bring consistency in the economy.

He said the economic meltdown has adversely affected the banking sector. It has hit capital availability, led to an increase in interest rates and most importantly has resulted in the lack of confidence and trust.

Regarding the bank’s diversification, Misra said it has entered into a life insurance joint venture, which provides a range of solutions to people, particularly the uninsured rural and semi-urban populace where the awareness about life insurance and its benefits were low.

He also said the North-based bank has now achieved strong access in the southern market as well, especially after the merger of Global Trust Bank (GTB).

Regarding the merger of GTB, Misra termed it a historical experience of a smooth merger, which strengthened the bank with 104 more branches, mostly in the southern states.

“You see, although the government had given OBC five years to absorb the GTB losses, but the process to absorb the losses of Rs 1,225 core was completed well in advance by March 2008,” he said.

At present, the bank has a total business of over Rs 1,60,000 crore with the target for the current financial year set at Rs 2,00,000 crore.