Boi Proposes 8 More Recovery Branches

Bank of India plans to set up eight specialised recovery branches by March 1998, taking the number of such recovery branches to 10. This was decided in a meeting of the banks board of directors earlier this month.

The first three of these recovery branches will be set up in this fiscal itself and will be located at Delhi, south Bihar (the Ranchi zone) and Calcutta. The remaining five will come up in fiscal 1998 in the Madhya Pradesh zone, the Uttar Pradesh zone, the Andhra Pradesh zone, Madras and the Patna zone. The bank already has two such specialised branches operating in Pune and Mumbai respectively.

 

Besides, it plans to set up at least one recovery branch in each of its 17 zones in the country. These specialised branches are being set up as part of the phased implementation of the recommendations made by Coopers and Lybrand with respect to the organisational restructuring of the bank.

With these branches aimed solely at looking into the matter of non-performing assets, the bank hopes to reduce its NPAs from the current level of 7 per cent. The modus operandi would be to refer each doubtful advance to the recovery branch in the relevant zone. The recovery branch would attempt to improve servicing of the debt. Sources in the bank feel that specialised banking is the key word of the future and this is the direction in which Bank of India is heading. In fact, the bank plans to set up a network of specialised branches of various categories.

These will include industrial finance branches, personal banking branches, overseas (forex business) branches, capital market (merchant banking business) branches and leasing specialised branches besides recovery branches.

Bank of India is amongst the more profitable public sector banks in the country. The bank has a deposit base of about Rs 23,612 crore and advances aggregating Rs 13,084 crore as on January 31, 1997.

The banks current non-performing asset base of about 7 per cent is much lower than that of many public sector banks.

The banks public issue of Rs 650 crore is open at present. The response to the issue has reportedly been very good. The mood in the bank is quite upbeat and sources in the bank are confident that the issue will be oversubscribed.

A clear picture will, however, emerge only after the issue closes on February 28.