Bank of Maharashtra sees 30 per cent rural credit growth

Bank of Maharashtra is planning a 30 per cent increase in rural credit over the last year in the fiscal 2007-08. Last year the bank disbursed Rs 2,700 crore in rural areas, 90 per cent of which accounted for agriculture credit.

This was informed by M D Mallya, chairman and managing director of Bank of Maharashtra, on the sidelines of the FICCI Banking Conclave 2007 on Friday.

The overall bank credit grew by over 25 per cent last year, with agriculture credit growing at the rate of 40 per cent.

In order to meet the growing credit requirement, the bank is also planning to raise Rs 650 crore fund this year by means of upper and lower tier II bond and perpetual debt.

"As the bank credit grew by 25 to 30 percent over the last year, the the fund would be required to maintain a capital adequacy ratio of 12 per cent this year," said Mallya.

Even though a majority of bank's branches were located in Maharashtra, the bank was aiming a pan India presence in rural credit market, added Mallya.

In Maharashtra, where the bank has 928 branches, it has identified 19 districts for 100 per cent financial inclusion.

The move follows the success story of the bank in the Jalgaon district, where nearly 100 per cent of financial inclusion was achieved by way of schemes like no frill account and general purpose credit card system.

The bank has tie ups with several NGOs in the region for roping in unbanked population through door to door campaigns. "Lending in rural areas is no longer target mandated. It has become commercially viable activity," said Mallya.

In 2006-07, the net profit of the bank increased to Rs 271.84 crore as against Rs 50.79 crore for the previous year registering a 435 % growth.