economictimes.indiatimes.com
4 Mar, 2008
MUMBAI: Bank of India (BoI) has said that it has around Rs 400-crore agri loans which come under the purview of the debt-waiver scheme announced by the finance minister.
According to BoI chairman and managing director TS Narayanasami, the bank has made provisions for Rs 75 crore of these non-performing loans. He added the finance minister’s decision to waive off debt to farmers would not adversely affect the profitability of public sector banks (PSBs). Mr Narayanasami said, “The government has a substantial stake in terms of equity in all PSBs and they will not compromise on this while working out the methodology of the debt-waiver scheme.”
Government-owned banks are the main providers of credit to these farmers and were perceived to be affected by the Rs 60,000-crore debt-waiver plan that the government announced in the Budget. BoI, on its part, has Rs 400-crore loans that come under the purview of the debt-waiver scheme.
“We are confident there will not be any negative impact that the settlement modalities will have when they are finally structured. We believe that the government will not lose sight of PSBs,” he added. It is not yet clear how the government will go about settling the issue with banks. According to Mr Narayanasami, the mandate for the settlement will be given to the Reserve Bank of India or Nabard.
Incidentally, BoI’s domestic business crossed Rs 2 lakh crore on February 29. It witnessed a 23% growth in domestic credit to Rs 15,700 crore for the current financial year so far. It also recovered Rs 280 crore of previously written-off loans and upgraded bad loans worth Rs 200 crore. The bank is also in negotiations with Arcil and other asset-reconstruction companies (ARCs) to sell up to Rs 250 of NPAs.
The bank’s profitability in nine months has already crossed the last year’s figure. Mr Narayanasami attributed the rise in profits to a robust credit growth, non-interest income other than treasury income and good NPA-management. “We have been more intense in distribution of third-party products this year which resulted in fee income adding to our profitability,” he added.
BoI has recently received licences to open branches in Phnom Penh (Cambodia) and Glasgow (Scotland). It will also operationalise subsidiaries in Tanzania and Canada and is looking at opening branches in Auckland (New Zealand) and Cairo (Egypt) soon, according to BoI general manager (international operations) BS Seshadri.
4 Mar, 2008
MUMBAI: Bank of India (BoI) has said that it has around Rs 400-crore agri loans which come under the purview of the debt-waiver scheme announced by the finance minister.
According to BoI chairman and managing director TS Narayanasami, the bank has made provisions for Rs 75 crore of these non-performing loans. He added the finance minister’s decision to waive off debt to farmers would not adversely affect the profitability of public sector banks (PSBs). Mr Narayanasami said, “The government has a substantial stake in terms of equity in all PSBs and they will not compromise on this while working out the methodology of the debt-waiver scheme.”
Government-owned banks are the main providers of credit to these farmers and were perceived to be affected by the Rs 60,000-crore debt-waiver plan that the government announced in the Budget. BoI, on its part, has Rs 400-crore loans that come under the purview of the debt-waiver scheme.
“We are confident there will not be any negative impact that the settlement modalities will have when they are finally structured. We believe that the government will not lose sight of PSBs,” he added. It is not yet clear how the government will go about settling the issue with banks. According to Mr Narayanasami, the mandate for the settlement will be given to the Reserve Bank of India or Nabard.
Incidentally, BoI’s domestic business crossed Rs 2 lakh crore on February 29. It witnessed a 23% growth in domestic credit to Rs 15,700 crore for the current financial year so far. It also recovered Rs 280 crore of previously written-off loans and upgraded bad loans worth Rs 200 crore. The bank is also in negotiations with Arcil and other asset-reconstruction companies (ARCs) to sell up to Rs 250 of NPAs.
The bank’s profitability in nine months has already crossed the last year’s figure. Mr Narayanasami attributed the rise in profits to a robust credit growth, non-interest income other than treasury income and good NPA-management. “We have been more intense in distribution of third-party products this year which resulted in fee income adding to our profitability,” he added.
BoI has recently received licences to open branches in Phnom Penh (Cambodia) and Glasgow (Scotland). It will also operationalise subsidiaries in Tanzania and Canada and is looking at opening branches in Auckland (New Zealand) and Cairo (Egypt) soon, according to BoI general manager (international operations) BS Seshadri.
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