The Hindu Business Line : Golconda Grameena Bank moves to reduce NPAs

Golconda Grameena Bank, the regional rural bank (RRB) sponsored by the State Bank of Hyderabad, has chalked out an action plan to substantially bring down the non-performing assets (NPAs) further during the current fiscal year.

It had successfully reduced its gross NPAs to 9.36 per cent during the fiscal ended March 31, 2004 from a high of 16 per cent in the previous fiscal and also brought down the net NPAs to 6.32 per cent from 10.88 per cent.

In a press release here on Thursday while announcing the audited financial results for the fiscal 2003-04, the bank said it has prepared an action plan to reduce the gross NPAs to 4 per cent during the current fiscal.

For the fiscal 2003-04, the bank has achieved a total business of Rs 151.27 crore compared with Rs 123.13 crore in the previous fiscal, recording a growth of 22.85 per cent. It posted a net profit of Rs 3.51 crore (Rs 2.13 crore), registering a growth of 65 per cent.

While the deposits have increased to Rs 99.7 crore (Rs 82.72 crore) with a growth of 21 per cent, the advances rose to Rs 51.57 crore (Rs 40.41 crore), recording an increase of 27.6 per cent. The bank claims to have crossed the national average growth in deposits and advances.

For the fiscal under review, the bank has recorded return on assets (average net margin) of 3.18 per cent compared with 2.05 per cent in the previous fiscal. It has recorded a substantial growth in accumulated reserves and surplus at Rs 9.51 crore (Rs 5.99 crore). The business per employee stood at Rs 2.36 crore (Rs 1.95 crore), while the credit-deposit ratio improved to 52 per cent (49 per cent).

According to the bank, it has surpassed the budget goals set for deposits, per employee business, per branch business, profits and reserves as per the memorandum of understanding signed with its sponsor bank - State Bank of Hyderabad - for the fiscal under review. The bank has also become a corporate agent of SBI Life Insurance Company to sell the insurance products through its branch network.

The bank expects to record a growth of Rs 40 crore in business during the current fiscal, with an increase of over 26 per cent. Apart from the action plan of improving the share of priority sector to total advances, the bank also plans to fully computerise six more branches during the current fiscal. The priority sector advances during 2003-04 stood at 66 per cent compared to the benchmark of 60 per cent prescribed by the Reserve Bank of India.

More Stories on : Regional Rural Banks | Non-Performing Assets | Andhra Pradesh

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