The Hindu Business Line : Corpn Bank plans more rural branches

The bank had 165 (23 per cent) branches in rural areas, 156 (22 per cent) in semi-urban areas, 202 (28 per cent) in metros, and 199 (27 per cent) in urban areas as on March 31, 2004.

The bank, which opened 12 branches in rural and semi-urban areas during the current financial year, is planning to open 20 more by the end of next March.

The Chairman and Managing Director of the bank, Mr K. Cherian Varghese, has cited lack of branches in `potential' rural areas as one of the reasons for not being able to achieve 18 per cent target in agriculture lending.

He told Business Line that Corporation Bank, which was nationalised in the second phase, did not have many branches in `potential' rural areas. Efforts are on to open more such branches.

Referring to the dispensation of service area approach in the last Budget, he said this could help the bank in opening more branches in `potential' rural areas.

The RBI report on Trends and Progress of banking in India said that the disbursement of Corporation Bank for agriculture sector is 9.58 per cent of the total credit against the target of 18 per cent.

For this, Mr Varghese said that though the percentage of agriculture advances may be the lowest, there has been a considerable jump in the level of disbursement this year compared to last year.

Mr Varghese finds the route of self-help groups (SHGs) as a good business opportunity to increase the agriculture credit portfolio. The bank - in association with Sri Kshetra Dharmasthala Rural Development Project (SKDRDP), an NGO - has already formed 1,503 SHGs in Dakshina Kannada district.

"We are not doing any charity by financing SHGs. This is a good business," he said, adding, "These SHG members could become potential customers of our bank. This will help in creating a solid client base."

He said the cost of borrowing is less in this case, and the repayment ethos is good. The repayment is almost 100 per cent in SHGs.

The bank is also focusing on area-specific projects. After looking at the problems faced by coffee growers in Kodagu and Chikmagalur belt, the bank has come out with an idea to encourage them to take up alternative crops on the surplus land available in their farming area.

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