Bank Of India Nets Rs 125 Cr From Gilts

Bank of India (BoI) has made a profit of Rs 125 crore in the current fiscal so far on account of its trading in the government securities compared with a total profit of Rs 26 crore in this segment for the whole of last year.

This was announced by BoI officials at a press conference here in Mumbai yesterday.

V H Ramakrishnan, general manager, attributed the profits to "buoyant conditions in the securities market."

Officials also disclosed that the bank would not have to suffer any losses on account of the assured returns scheme offered by Bank of India Mutual Fund.

 

The assured returns scheme of the BoI, called BoI Double Square Plus, offered investors who bought the unit in 1990 at a price of Rs 100, a guaranteed return of Rs 400 by this year.

"There were apprehensions last year that the bank would have to suffer a big loss since the net asset value last year was Rs 233 - far short of Rs 400," said Ramakrishnan. "However because of the excellent conditions in the capital market and a reshuffling of the portfolio, the NAV is currently Rs 413. We are confident that the bank will not have to suffer a loss on account of this scheme," he added.

He disclosed that investors had been assured of a return of Rs 300 for the scheme in 1998. "Because the net asset value was lower than that, the bank made up the difference by giving a cheque of Rs 32 crore to the mutual fund last year."

Speaking about the bank's centralised banking project, BoI's deputy general manager (IT), K. Ramakrishnan said that the bank was spending about Rs 100 crore to network its five hundred computerised branches to a central data centre.

This would allow a customer to access his account from any of these branches. The plan envisages a pilot run with two branches later this year. "The remaining branches will be gradually computerised and the project will be completed by 2002," he said. The bank has also launched a new floating rate deposit scheme for corporates and high net-worth customers. The deposit would be for one year with a minimum deposit of Rs 1 crore. The interest rate on the deposit would be set quarterly at spread of 25 basis points over the 91-day treasury bill rate.