Indian Overseas Bank is planning to open 40 specialised agri business branches to focus on rural lending, with two of the branches in Andhra Pradesh, according to M. Narendra, Chairman and Managing Director of the bank.

He told presspersons here on Monday after inaugurating the new premises of the regional office of the bank, that 12 such branches would be opened soon in Karnataka, Maharashtra, and Odisha. “There is immense potential for such branches in Andhra Pradesh too, and we are initially planning two such branches in Godavari district,” he said.

He said the branches would focus on lending to small farmers and agri-processing units rather than promoting high-tech agriculture. He said 70 per cent of the bank’s branches were in rural and semi-urban areas. During the current financial year, apart from crop loans, the bank had pumped in additional investment of Rs 616 crore for agri-processing units.

Apart from agriculture, he said, the bank had floated special loan schemes for urban horticulture. Under the scheme, an individual could borrow Rs 25,000 to Rs 2.5 lakh for raising a roof garden or a backyard garden in his or her house, while institutions could borrow up to Rs 25 lakh. The bank wanted to lend at least Rs 100 crore under the head during the year.

He said the bank was also concentrating on medium and small enterprises by opening special SME loan processing centres and on the retail business by opening rapid retail centres. IOB had also provided credit linkage to 4,35,000 women's self-help groups, Narendra said.

As the bank was rapidy expanding, he said, it had recruited 1,500 officers and 1,500 clerks recently and 500 special credit officers would be appointed. The bank’s total business amounted to Rs 3,45,000 crore. The bank had set up six branches overseas and four representative offices. The representative offices in China, Dubai and Vietnam would soon be upgraded into full-scale branches.

NPAs: He said non-performing assets of the bank were on the slightly higher side, but they were still within manageable limits. “As on September 30, the gross NPAs stood at Rs 5,930 crore (inclusive of Rs 630 crore contributed by overseas branches), roughly 3.87 per cent of advances. The net NPAs stood at Rs 3,378 crore, roughly 2.25 per cent. We are expecting economic recovery in the near future and we will recover the amount. Certain sectors such as iron and steel and textiles have contributed to the NPAs. But there is really no cause for concern,” he added.

sarma.rs@thehindu.co.in

(This article was published on December 10, 2012)
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