By Vijay C Roy
Public sector lender Corporation Bank will take a call on lending rates by mid- October. “We are examining the current situation and most probably by mid-October will take a decision in this regard,” said Ajai Kumar, chairman & managing director.
The base rate is currently 10.50 per cent. Recently, the bank slashed interest rates on home, car and educational loans with effect from September 1 for a three-month period.
The state-run bank also waived the processing fee for these loans.
Having launched a special scheme for the festive season, the bank is targeting a business of Rs 3,000 crore this season.
On being asked about net interest margin(NIM), Kumar said: “Our NIM is 2.48 per cent and it will be remain stagnant this fiscal as our Casa (current and savings accounts) growth is stagnant.’’ Having achieved a business of Rs 2,40,000 crore -- Rs 1,00,000 crore in advances and Rs 1,40,000 crore in deposits -- by September this year, the bank hopes to touch Rs . 280,000 crore business by the end of the fiscal. In the current fiscal, the bank expects a deposit growth of 15 per cent and 16 per cent credit growth.
To achieve the target, the Karnataka-based bank is aggressively increasing its exposure to loans to retail and small and medium enterprises (SMEs).
“Currently, our retail exposure is about 19 per cent of the total business. We are aggressively targeting retail loans and plans to increase our exposure in this segment as this sector has huge potential. Further, we are planning to add 300 branches in the current fiscal, especially in the rural and semi urban areas of Gujarat, Punjab, Rajasthan, Bihar, Orissa and Jharkhand,” said Kumar.
The bank has drawn appropriate strategies to increase credit to the SMEs sector by launching specialised loan schemes at attractive interest rates. The bank’s portfolio under SME sector as on 31 March 2012 was Rs 14,340 crore as against Rs 11,642 crore a year ago. Within the SME sector, the micro and the small enterprise portfolio swelled from Rs 10,707 crore in March 2011 to Rs 13,752 crore in March 2012t.
For the current fiscal, Corporation Bank’s target under SME segment is Rs 18,300 crore, which is 14 per cent of the projected net bank credit of Rs 1,27,000 crore. Out of the SME target, Rs 17,000 crore would be deployed under the micro and small enterprises.
To cater to the SME segment in a big way, the bank has also launched exclusive SME loan centres in various cities across the country. With the launch of the Chandigarh SME Loan Centre, the total number of SME centres has increased to 12. The other centres are located at Delhi, Hyderabad, Bangalore, Chennai, Coimbatore, Pune, Mumbai, Vadodara, Kolkata, Mangalore and Ludhiana.