The Hindu Business Line : Oriental Bank plans to raise tea sector lending

"In 2006-07, our tea advance amounted to Rs 40 crore, which we would like to raise to Rs 100 crore in 2007-08," Mr R.M. Sharma, General Manager for the Eastern region covering large parts of West Bengal, Sikkim and the North-East, told Business Line.

The bank will open more branches in the north-eastern region in the current fiscal.

Right now, there are only four branches, all in Assam (two in Guwahati and one each in Jorhat and Tinsukia).

The plan is to open two more branches in Assam, at Dibrugarh and Nowgaon, and one each in Shillong (Meghalaya) and Agartala (Tripura).

The number of branches in Sikkim and Siliguri too would be increased to two each from one each, he added.

In the eastern region, OBC has only one rural branch at Netra in South 24 Paraganas district of West Bengal. As a result, the bank's agricultural lending does not amount to much. The projected increase in tea advances would mean higher agricultural credit, he said.

Besides, the new industrial policy for the north-eastern region offers attractive packages, including 30 per cent capital subsidy.

"I am sure that this will encourage many entrepreneurs to invest in the region in a big way and we would like to see our bank a partner in the development process."

Balance portfolios

The accent on tea advance would be part of the bank's overall plan to balance advance and deposit portfolios, he added.

Currently, the iron and steel sector accounts for nearly 60 per cent the bank's advances in the region.

"We would like to change the mix by diversifying our advance portfolio to include more of cement, infrastructure, retail and small-scale and SMEs in the current year." (Mr Sharma also said that a retail hub was being launched in the bank's regional office at Salt Lake in the city.)

A more balanced deposit portfolio would be achieved by providing thrust to mobilising low-cost current and savings deposits.

"The plan is to mobilise an additional Rs 150 crore or so of current and savings deposits to reach total level of Rs 665 crore in the current year," he said, indicating that the bank would go slow on mobilising high-cost bulk term deposits.

Attempts would be made to keep them at last year's level of Rs 400 crore.

As a result, normal time deposits are estimated to rise to Rs 2,000 crore from last year's Rs 1,434 crore.

In 2007-08, the bank is targeting business growth of 33 per cent in the eastern region to touch Rs 6,300 crore, entailing an incremental business of Rs 1,327 crore compared to Rs 1,271 crore in 2006-07, Mr Sharma said.

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