Repco looks at RBI policy to operate as commercial bank

Chennai-based Repco Bank, a cooperative bank under the Union ministry of home affairs, is awaiting the Reserve Bank of India (RBI) to come up with a licencing policy to join the group of commercial banks in the country.

The bank is expecting an infusion of around Rs 100 crore in the next three years, to double its total business from the current Rs 7,061 crore to Rs 15,000 crore by 2014-15, said a senior executive from the bank.

The bank was incorporated as the Repatriates Co-operative Finance and Development Bank Limited in 1969 by the Union government with the main objective of rehabilitating repatriates from Burma and Sri Lanka.

The board of directors appointed by the Centre governs the operations of the institution under the administrative control of the ministry of home affairs, under special powers conferred in the bylaws.

The bank would look at the opportunities to work as a commercial bank under the RBI regulations, though the administrative control would remain with the ministry of home, said R Varadarajan, chief executive and managing director of Repco Bank.

“We are looking at the RBI’s licencing policy for further proceedings. We are not a forex dealer now and the licencing will give us the powers to deal with forex,” Varadarajan said, adding that the ATMs of Repco Bank were currently not shared and the licencing would open up the possibilities of sharing the ATMs and similar transactions with other scheduled commercial banks.

Around 82 per cent of the Rs 97-crore paid-up capital is held by the Union government, 11 per cent is with repatriates and the remaining is from the state governments of the four southern states.

Repco Bank has posted a 35 per cent growth in total business to Rs 7,061 crore for the financial year ended March 31, 2012, as against Rs 5,200 crore in the previous year. Its net profit increased 40 per cent to Rs 73 crore during the fiscal year 2011-12, as against Rs 52 crore in the previous fiscal year, Varadarajan said.

The bank has submitted a three-year plan, which would require a capital infusion of Rs 100 crore from the existing stakeholders, especially from the central government. The target is to achieve Rs 15,000-crore total business in the next three years.

“We would reach the target easily if we stick on to the current growth rate of 35 per cent for the next three years. We are expecting to reach Rs 9,500 crore business in the current financial year,” he said, adding that the bank was growing at double the pace of the industry.

The bank’s loan disbursement during the last financial year was around Rs 1,400 crore and it is aiming a loan disbursement of Rs 2,000 crore this year. With around 75 branches at present, it is planning to open 10 new branches, of which seven would be in Tamil Nadu. “We want to expand the number of branches to 120 in the next three years,” he said.

Repco Home Finance Limited, a subsidiary of the bank, is in the process of listing the company through an initial public offering (IPO). It has submitted a draft red herring prospectus in September, 2011, to raise around Rs 200 crore, and is awaiting the regulator’s nod for further proceedings.