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M. Ramesh

Chennai , March 14

INDIAN Overseas Bank's advances this year have crossed the Rs 4,300-crore mark, surpassing the bank's initial expectations.

In May 2004, IOB had projected advances of Rs 3,000 crore for the year. In 2003-04, IOB's credit offtake was Rs 2,990 crore.

However, in the `deposit' area, IOB (like many other banks) fell short of targets. The bank had estimated it would be able to get incremental deposits of Rs 3,500 crore. But, till the end of February, IOB's incremental deposits came to a shade less than Rs 1,000 crore.

IOB's Chairman and Managing Director, Mr S.C. Gupta, told Business Line today that while the total incremental deposits were less than Rs 1,000 crore only, the low-cost `savings bank' deposits grew Rs 1,675 crore. This, he said, meant that the bank was able to replace its high-cost term deposits with low-cost demand deposits.

As incremental deposits increased less than Rs 1,000 crore and fresh credit was Rs 4,300 crore up to February, the bank expects to end the year with an incremental credit-deposit ratio of 450 per cent, he said.

The credit offtake was funded by proceeds coming out of selling government securities, Mr Gupta said. But, for advances growth next year, the bank would need to raise deposits. Anticipating the need to gather more deposits, the bank has recently hiked deposit rates across various tenors.

Meanwhile, IOB was yet to take a decision on the premium at which the bank's GDRs will be offered. It would take the bank about three months to decide that, Mr Gupta said.

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