Good Going, But How Far?

When the aggregate non performing assets (NPAs) of the new private sector banks are estimated to have touched the Rs 100-crore level during 1996-97, Centurion Bank has recorded zero NPA level for the year.

How did Centurion Bank achieve this? "We have been extremely cautious in selecting our loan portfolio - sometimes even at the cost of growth and profit," says Ashish Sen, managing director. "We have been very careful about the quality of our assets and have kept a tight grip on it throughout our operations, he adds.

Not that this has robbed the bank of business. Its results for the 1996-97 have been impressive. In the second year of operation, the bank has recorded a 380 per cent jump in deposits to Rs 1,032 crore. Advances have grown by 328 per cent to Rs 890 crore.

 

At the end of the year, Centurion Bank had a network of 20 branches, all linked up with latest technology.

How did the bank manage to post such impressive results?

"We have had sizeable non-funds based income during the year. Additionally, we have an excellent treasury management which quickly turns around its security portfolio," says Sen. Well done, so far. The question is, will the bank be able to maintain its good record in the coming years, particularly when competition for good assets intensifies and all banks except the top few end up with lowering the quality of their portfolio?

Abhijit Doshi