Icici Bank Puts Rs 90 Crore Into Nabard, Sidbi

ICICI Bank has deposited about Rs 90 crore in the National Bank for Agricultural and Rural Development (Nabard) and the Small Industries Development Bank of India (Sidbi) to make up for its shortfall in its priority sector lendings in this fiscal.

Bank chairman P V Maiya told Business Standard that though the bank has been able to achieve the 22 per cent lending requirement for the small scale sector, it has defaulted in its lending requirements to the agricultural sector.

Maiya pointed out that with most of the bank's 22 branches and two extension counters being in the urban and semi-urban localities, it has been difficult for the bank to meet the target for agricultural credit.

Adding to the banks problems in this respect, are the multiplicity of guidelines stipulating which kinds of loans comprise agricultural credit.

This forced deposit in Nabard and Sidbi bonds has inevitably had an impact on the bank's bottomline.

Though the bank's chairman dismissed the impact as insignificant, he admitted that against a yield of only eight per cent from these bonds, the bank has to a shell out a significantly larger sum as cost of funds.

Maiya told Business Standard that the bank plans to shift its focus to commercial agriculture like floriculture and horticulture in the area of agricultural credit.

Promoted jointly by ICICI and SCICI, ICICI Bank is set to end the year with a 100 per cent growth in its net profits. From a net profit of Rs 16.51 crore in 1995-96, the bank hopes to chalk up a net profit of over Rs 32 crore this year.

The bank expects to end the year with it advances at about Rs 775 crore and deposits at about Rs 1,200 crore. As on March 20, 1997, the bank had deposits of Rs 1,100 crore and advances of Rs 755 crore.

ICICI Bank has recently received permission from the Reserve Bank of India to dilute the stake of its promoters by 25 per cent.

Maiya told Business Standard that the bank was yet to make a decision as to whether it would divest its stakeholding or whether it would go in for a public issue.

"With an expected capital adequacy ratio over 15 per cent as on March 31, 1997, we don't really need any more capital," he added.

However, should the bank decide on a public issue, the issue would be of about Rs 40 crore.

"We would try and make the public offer as soon as possible," said P H Ravikumar, executive vice president, treasury and forex, ICICI Bank.