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Santanu Sanyal

After GTB, focus shifts to diversification

Kolkata , May 3

Oriental Bank of Commerce (OBC) is mulling joint ventures with foreign companies to launch insurance business, according to its CMD, Mr K.N. Prithviraj.

"The thought process within the bank has just started," he told Business Line here on Tuesday, pointing out that earlier effort in this regard did not make headway as the bank was preoccupied in the merger of Global Trust Bank.

"There is a need to diversify our business," Mr Prithviraj observed, adding that the distribution of products of other companies could not be an ideal proposition in the long run.

OBC was currently selling products of Life Insurance Corporation of India, Oriental Insurance and Franklin Templeton.

Mr Prithviraj identified several thrust areas such as raising business from Rs 85,000 crore in 2005-06 to Rs 1,00,000 crore in 2006-07, accent on credit expansion, mobilising low-cost deposits, shoring up capital and stepping up recovery.

He estimated that the deposit growth in 2006-07 would be around 17-18 per cent as compared to a meagre five per cent in 2005-06 and credit growth around 20 per cent (more than 29 per cent).

"In 2005-06, it was our conscious decision not to go overboard in the matter of mobilising high-cost deposits," he said and pointed out that a good deal of emphasis was being given to mobilise low-cost deposits in the current fiscal.

To expand branches

Mr A.C.A. Pereira, Executive Director, who inaugurated the bank's 1170th branch, also the 34th branch in the city, said the bank proposed to open 53 new branches in the current fiscal and 63 offsite ATMs as a means to mobilise low-cost deposits. Right now the bank has 534 ATMs.

More Stories on : Public Sector Banks | Insurance | Diversification | Oriental Bank of Commerce

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