The Hindu Business Line : Bank of India to focus on qualitative growth

Coimbatore, April 27 Bank of India would focus more on the qualitative aspect of the business rather than on volume growth, its Chairman and Managing Director, Mr T.S. Narayanaswami, has said.

Explaining the reason for looking at qualitative growth, he said “the system was very robust in the last three years, the credit expansion was good. But now, there appears to be a likely slowdown in economic growth. So, we have taken this as a year of consolidation. Our business target for 2008-09 is Rs 3,12,000 crore against a business mix in excess of Rs 2,60,000 crore in 2007-08. Overseas operations contribute to 35 per cent of profits and we are not into any sub-prime crisis.’

On derivatives, he said: ‘Any large bank will have exposure to derivatives, but there is no reason for alarm because they are all corporates who bank with us. In a globalised economy, one should be prepared to take cross currency transactions,” he said without dwelling into this at great length.

Mr Narayanaswami was here in connection with the inauguration of BoI’s corporate banking branch, the 14th such branch in the country. “The credit outlay for the branch has been fixed at Rs 500 crore. It will offer all banking services under one roof, albeit to large corporate borrowers in this region.”

BoI has in the past four weeks operationalised three corporate banking branches at Baroda, Hyderabad and Mumbai. When asked how many more corporate banking branches were in the pipeline, Mr Narayanaswami said ‘we will open as and when the need arises’.

To a query on CRR hike he said “banks should not show panic reaction by increasing the interest rate. Inflation management is the need of the hour and one has to strike a balance between inflation and growth. This will entail fiscal steps and monetary measures. Monetary measures will have little impact; it is the supply side that has to be managed. As inflation softens, the debt market also will soften. Deposit rates are covered by securities market rate.”

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