CorpBank to shed Rs 8,000 cr bulk deposits

Mangalore-based public sector lender Corporation Bank plans to shed bulk deposits worth around Rs 8,000 crore by March 2013. Its present bulk deposits level including certificate of deposits (CDs) stands at Rs 36,459 crore.

During the third quarter starting October 1 2012, the bank shed bulk deposits worth around Rs 5,000 crore, a top official of the bank said here on Friday.

“As per the Reserve Bank of India guidelines, we are required to reduce the level of bulk deposits to 10 per cent and CDs to 5 per cent of our total deposits. Presently, our deposits stand at Rs 1,43,000 crore. As of now the bulk deposits account for 16 per cent of the total deposits, while, CDs account for about 9.7 per cent. We intend to bring down the levels of bulk deposits and CDs as stipulated by RBI,” Ashwani Kumar, executive director, Corporation Bank said.

 

The bank, presently, has around Rs 13,959 crore under certificate of deposits (CD) and Rs 22,500 crore under bulk deposits. The average rate of interest offered by the bank on bulk deposits was 10.3 per cent, he said.

Corporation Bank plans to compensate the loss of bulk deposits by increasing its retail and current account and savings account (CASA) deposits. Its CASA level stood at 23 per cent of total deposits as at September 2012. The bank plans to increase it to 25 per cent by March 2013.

In order to increase the CASA level, the bank has launched a campaign from July 16 to November 30 this year. So far, the bank has added 1.4 million new accounts under this campaign.

Kumar further added that the bank has seen a credit growth of 18 per cent year-on-year as of September 30, 2012. Its advances grew by 18 per cent to stand at Rs 96,000 crore while the deposits grew by 16-17 per cent at Rs 1,43,000 crore.

The bank has also launched a campaign for small and medium enterprises for a limited period from October 20 to January 31, 2013 and is offering loan at a 50 basis points discount. During this period, the bank aims to sanction fresh loans worth Rs 5,335 crore, he said.

The outstanding SME loans of the bank stood at Rs 15,000 crore and the bank aims to increase it to Rs 20,000 crore by March 2013. Since the launch of dedicated SME Loan Centres in May this year, the bank has sanctioned additional Rs 2,000 crore to SMEs. It has opened 14 exclusive SME loan centers across the country. The 15th centre would be opened in Trichy on November 3, 2012, he added.