The Hindu Business Line : ‘No increase in interest rates seen in medium term’

Mangalore, May 23 Bank of Baroda is planning to achieve a business of Rs 3.10 lakh crore during 2008-09. Addressing presspersons here on Friday, Mr M.D. Mallya, Chairman and Managing Director of the bank, said that the bank, which achieved a business of Rs 2.59 lakh crore during 2007-08, is planning to reach a business of around Rs 3.10 lakh crore by the end of the current fiscal. It wants to achieve a growth of 22 per cent in deposits and 26 per cent in advances during the fiscal.

The bank would continue to grow in all parameters and concentrate on growth in areas of retail banking, SME and priority sector, he said.

The bank is planning to increase its retail customer base from 30 million to 33 million during the current fiscal.

Loan waiver

Asked about the implementation of the loan waiver scheme, which was announced in the Union Budget this year, he said as far as Bank of Baroda is concerned about Rs 1,200 crore qualify under the loan waiver scheme. Of this, Rs 282 crore are NPAs. “Once the modalities are received, we will be able to implement it within the time limit of June 30,” he said.

Bank of Baroda, which has a presence in 25 countries, is planning to increase the number of offices from 71 to 81 during the year. International business contributes to nearly 20 per cent to the total business of the bank, and one-third of the net profit.

On inflation, Mr Mallya said that the Government and the RBI have taken lots of measures for containing inflation. Various monetary steps initiated by RBI, coupled by fiscal steps taken by the Government would ensure that within the next six to eight weeks, inflation numbers are moderated.

Asked about the interest rate outlook, he said: “We do not expect any further increase in interest rates for the medium term. But going forward, may be six months or nine months, I would expect the interest rate to moderate and show a declining trend.”

LOAN FACTORIES

Later, addressing members of the Kanara Chamber of Commerce and Industry (KCCI) on the topic ‘SME banking’, Mr Mallya said that the bank’s ‘SME loan factory’ concept was well received among the customers. During 2007-08, the bank disbursed around Rs 6,000 crore of loans through 27 loan factories.

Enthused by the response to the loan factories, the bank is now planning to set up eight more loan factories during the current fiscal, he added.

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