The Hindu Business Line : Banks turn in a good show

Banks have been witnessing sound growth in overall business (deposits and advances) in the eastern and north-eastern region, according to the latest figures provided by banks. There has been a good growth in deposits and advances in the region so far this year despite some challenges, such as manpower and infrastructure, said senior bank officials.

On an average, banks have witnessed 15-20 per cent growth in credit and deposits this year over last year.

In the case of Allahabad Bank, business in the eastern region stands at Rs 33,825 crore as on September 30, 2008 and accounts for almost 27 per cent of the bank’s total business in the country. Deposits at Rs 22,336 crore account for 30 per cent of the bank’s total deposits, while advances at Rs 11,488 crore account for 22 per cent of the bank’s total credit portfolio. The credit-deposit ratio was at 51.43 per cent.

The bank’s business in the north-eastern region stands at Rs 1,787 crore, deposits at Rs 1,289 crore and advances at Rs 498 crore. The CD ratio in the region was at 38.61 per cent.

CD ratio low

Talking about the low CD ratio of banks in eastern and north-eastern region, Mr K.R. Kamath, Chairman and Managing Director, Allahabad Bank, said, “The CD ratio of banks in these regions is generally lower than that in other parts of the country. Usually, most of the big projects get their funding done from banks based outside the region; hence, the disparity in the credit-deposit ratio.”

The bank has 2,218 branches spread across the country. It has 807 branches in the eastern region and 70 branches in the northe-eastern region as on date. The bank plans to add 17 branches in this region in 2008-09. “The bank’s focus will be on financial inclusion in the region and bringing all uncovered districts under the umbrella of banking services,” Mr Kamath said.

The eastern region accounts for almost 44 per cent of the total advances of United Bank of India. Advances in the region as on September 2008 were Rs 12,874 crore, while deposits at Rs 29,280 crore account for 67 per cent of the bank’s total deposits.

Advances in the north-eastern region stood at Rs 1,862 crore, while deposits were at Rs 5,337 crore.

United Bank expanding

United Bank has 1,431 branches spread across the country, of which 1,183 are from the eastern and north-eastern region. The bank plans to add 100 more branches in the region by March 2010.

According to Mr T.M. Bhasin, Executive Director, United Bank, the bank plans to set up 50 branches in the unbanked gram panchayats (GPs) of West Bengal over a period of five years. There are 941 unbanked GPs in West Bengal. Mr Bhasin, who is also the chairperson of the committee on ‘Extension of banking facilities in unbanked Gram Panchayat’s , said, “In the first phase, GPs without a bank branch within 10 km radius would be covered, and subsequently, it would be extended to other GPs in a phased manner in the next five years.”

Banks can either set up branches or work through business correspondent or business facilitators in order to reach out to the unbanked areas, he said. “There are 45 Primary Agricultural Credit Societies (PACS) in the State and we have requested them to assist banks in cheque collection and cheque payment services,” he said.

According to Mr Bhasin, the State Government has agreed to provide the necessary infrastructure to set up a branch, such as a room, electricity and connectivity. The committee has also recommended mobile van banking system to offer services to customers in these gram panchayats. “These mobile vans with currency chests can move from one GP to another, thereby covering two-to-three GPs in a day,” he added.

UCO Bank initiatives

UCO Bank has recorded 17 per cent growth in advances in the eastern region at Rs 12,063 crore as on March 31, 2008, against Rs 10,348 crore during the corresponding period last year. Deposits grew 25 per cent at Rs 17,457 crore (Rs 14,011 crore).

The bank has taken special initiatives for the north-eastern region. “We have introduced a scheme whereby small overdraft facility of up to Rs 500 can be sanctioned to ‘No Frills’ account holders in the region,” said a senior official at the bank.

The West Bengal and Sikkim zone of Indian Bank has seen a good growth in the industrial, corporate and business sectors during the seven months period ended October 31, 2008.

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