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M. Ramesh

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Chennai Feb. 8 In his Budget speech last year, the Union Finance Minister, Mr P. Chidambaram, promised that recapitalisation bonds issued to banks would be given `SLR status'. When implemented, the move would benefit Indian Bank immensely because the bank is sitting on a Rs 3,800-crore pile of such bonds.

When the bonds get counted as SLR securities, Indian Bank would not need to make the statutory investment in the Government securities for an additional Rs 12,000 crore of deposits. This is a big help at a time when credit growth is outpacing deposit growth and resources have to be found to give loans.

The bank's Dharavi branch — the first commercial branch in the slum — would be inaugurated on February 19 by Ms Usha Thorat, Deputy Governor, RBI. The bank, which has a branch close to the Dharavi, has about 7,000 accounts from residents of Dharavi, whose deposits cumulate to about Rs 15 lakh. Apart from making good business sense, the Dharavi branch would also go well with the bank's oft-articulated mission of becoming the `common man's bank'.

Dharavi is said to be Asia's largest slum, spread over an area of 1.75 sq km, and is home to a million people. It produces goods and services worth Rs 3,000 crore. However, commercial banks have generally ignored Dharavi, Mumbai, for a variety of reasons. Most of the residents are Tamil migrants. The slum is home to a flourishing leather industry.

More Stories on : Public Sector Banks | Govt Bonds

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