Greater Bombay Co-Op In Expansion Mode

The Rs 748-crore Greater Bombay Co-operative Bank is to shortly co-opt two more directors, having expertise in the banking/accounting and legal fields, on its board as part of efforts to strengthen corporate governance. Pending Reserve Bank of India's (RBI) approval for expanding branch network, the bank has decided to increase the number of extension counters to 10 in the next two years from one currently.

"The bank has 12 directors, mostly from the non-ferrous metal industry and the move to co-opt additional directors is to broadbase the composition of the board," managing director of the bank, Narendrakumar A Baldota, said at the launch of the bank's "Golden moments - certificate of deposit scheme."

 

Greater Bombay Co-operative Bank has set an exposure limit of Rs five crore per director, he pointed out and added that the 12 directors had taken advances amounting to Rs 20 crore after pledging adequate collateral with the bank. The capital adequacy ratio of the bank stood at 11.30 per cent as on March 31, 2001, against the RBI prescribed 8 per cent for scheduled urban co-operative banks.

Baldota said the strategy behind opening extension counters was that they could later be upgraded to branches once the central bank's approval is obtained. "For all practical purposes an extension counter functions exactly like a branch, the only difference being that the counter is prohibited from offering loans & advances," he said.

The bank, which has an equity capital of Rs four crore and reserves of Rs 53 crore, has sought RBI's permission for expanding branch network by three in Mumbai and Nasik. At present, it has 15 branches in Mumbai and one in Thane.

On the new certificate of deposit scheme, via which the bank intends raising Rs 100 crore between January 15 and February 15, 2002, Vidyadhar Dandawate, general manager, said, "the scheme has been launched to commemorate golden jubilee of the bank. Minimum deposit under the scheme is Rs 10,000 and subsequently deposits will be in multiples of Rs 10,000. The deposit period is 78 months and it attracts an interest rate of 11 per cent. The compounded rate of return works out to 15.76 per cent."