Punjab & Sind Sees Three-Fold Jump In Profit

Punjab & Sind Bank has forecast a three-fold increase in its profit to Rs 60 crore by the close of the current fiscal.

This follows the strong credit growth in the first half of the year, savings from reduction in deposit rates and expectations of good recovery of non-performing assets (NPA).

The bank signed a memorandum of understanding (MoU) with the Reserve Bank of India (RBI) last week on its performance parameters.

A senior official at the public sector bank yesterday said, the high point of business during the six months to September has been the 6 per cent growth in advances, recorded at a time when credit offtake for the banking sector as a whole has been tardy.

The RBI's bulletin dated September 12 indicated that advances have lagged by about Rs 3000 crore in the year to September, compared to the corresponding period last year, which is approximately a one per cent drop in credit growth.

The Punjab & Sind Bank official said: Credit was directed for consumer loans. We also extended a sizeable chunk to a few state governements for procurement of foodgrains.

So, basically a large amount of the advances went to wholesale borrowers.

The bank expects credit to grow by 11 per cent, to Rs 3,600 crore, for the year to March 1998, and deposits to grow by 16 per cent to Rs 7,200 crore.

The reduction in deposit rates is estimated to save the bank about Rs 25 crore of funds outflow. It hopes to recover Rs 100 crore of NPA in the year.