While expressing hope that the economy will turn around by January, Bank of India Chairperson and Managing Director Vijayalakshmi R Iyer maintained that her bank will be able to restrict the non-performing loans during the second quarter at the previous quarter level. In a quick chat with BusinessLine , Iyer outlined the impact of the recent Supreme Court judgment on coal block de-allocation and talks about the bank’s progress on the Jan Dhan front. Edited excerpts:

During your last results press conference in July, you had said that your bank will be able to bring down the gross NPAs to below 3 per cent and the net NPAs to below 2 per cent in the current fiscal. What has been your progress on this front?

Our net NPAs (non-performing assets) are at 2.14 per cent. We are below the industry average on this count. While the markets have turned, the economy is yet to turn around. The stresses in the banking system continue. Nonetheless, we will be able to contain the gross and net NPAs at the last quarter levels. For the full year, we are hoping that the economy will pick up from January and there will be some momentum. The Government is taking some small steps which will lead to better recoveries and more recoveries at the ground level.

What are the focus areas for your bank this year?

Home loans are a priority area for Bank of India. This year, we have decided to consolidate the business. Last year, we grew much higher than the industry and this year we want to consolidate mainly on the retail and small and medium enterprises (SMEs) side. For us, this is a year of retail and SME. Our home loan portfolio grew 32 per cent last year and we will try and maintain that growth rate. We are also trying to temper corporate loan growth.

What impact will the Supreme Court decision to strike down the allotment of 214 coal blocks have on your loan portfolio?

We do not have a direct exposure to any of the coal blocks. Indirectly, it will, of course, affect the power, steel and cement sectors, in which we have exposure. As of now, there are no issues as a result of the apex court’s decision. It is too premature to imagine and say what impact it will have. The existing miners are allowed to mine the coal blocks for six months. The Government has also assured that it will make some arrangements to let mining continue uninterrupted. So, we will have to wait and watch.

What is the progress of your bank on the Jan Dhan front?

On the Jan Dhan front, we have opened more than 14-15 lakh accounts. From this segment we have got current account and savings account deposits of ₹1,150 crore in the past two-three years. So, this is a segment which is bankable. It (the account opening) has picked up since August. We have also issued Rupay cards to about 75 per cent of the account-holders in this category.

How do you ensure that accounts opened under the scheme actually see some transactions?

One is to open the account and the other is to get the money to flow in. This is a segment where they don’t have too much money. So, when the Government subsidy and bills start flowing in, things will improve. At the same time, the State administration has to create awareness of the benefits of savings and routing the money through a bank than through a moneylender. Banks are also building logistics such as mobile applications and business correspondents. All this has to go hand-in-hand for things to improve.

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