The Hindu Business Line : Vijaya Bank to shed Rs 2,000 cr of high-cost deposits

Chennai, Nov. 5 Between now and March, Vijaya Bank will shed Rs 2,000 crore of high-cost deposits — deposits got at preferential rates of interests of around 11 per cent, the bank’s Executive Director, Mr T. Valliappan, told Business Line. This, he said, was one of the measures the bank is planning to lower its average cost of deposits, which hovers around 7 per cent.

“If we bring down the average cost of deposits by 50 basis points, we gain Rs 200 crore,” Mr Valliappan said, noting that the bank would be able to bring down the cost by at least 50 basis points.

When asked if shedding of deposits would mean shrinking of resources to lend, he observed that there were several other ways of raising resources.

Asked if the bank would bring down the lending rates, Mr Valliappan said, “We are not raising lending rates.”

Mr Valliappan, who was here in connection with a customers meet on Sunday, said that Vijaya Bank’s focus on non-fund-based income had begun to payoff. In the last quarter, the bank gave guarantees and opened letters of credit for about Rs 500 crore. The bank could earn about Rs 5 crore on this — straight to the bottomline.

Treasury is another area the bank is keen on earning from. Vijaya Bank has been taking a re-look at its HR practices. For example, it has hired “an outside agency” to do a “talent search” among its 4,500-odd officers, to identify about 1,000, who are “branch manager material.”

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Vijaya Bank to shed Rs 2,000 cr of high-cost deposits