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Mr P. Jayarama Bhat, Managing Director of Karnataka Bank Ltd, has asked the regional heads of the bank to focus on mopping up low-cost deposits.
Reviewing the performance of the bank for the quarter ended December 31, at a meeting of the regional heads here on Saturday, he said the efforts should be oriented towards mopping up more low-cost deposits so that there will not be undue strain on profitability.
The gap between credit and deposits is widening and there is a need to accelerate deposit growth to meet the increasing credit growth, he said, adding that any mismatch between credit and deposit will lead to lopsided growth which is not desirable for sustained growth and progress.
Banks have been upping their interest rates on deposits to shore up more and more funds to match the escalating credit, Mr Bhat said.
Stressing the need for ensuring quality of credit, he said any addition to the NPAs would affect the bottom line of the bank.
He also informed the meeting about the bank's decision to issue two shares for every five shares held on rights basis at a price of Rs 85 a share, including the premium of Rs 75 a share.
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