Bank of Maharashtra plans to grow its business (deposits and advances) by about 22 per cent in the current financial year, against about 10 per cent growth in FY2011, according to a top bank official.

The bank will increase thrust on lending to retail, small and medium enterprises, agriculture and mid-sized corporates and grow low-cost current account and savings bank account (CASA) deposits, said Mr M. G. Sanghvi, Executive Director.

The capital infusion of Rs 352 crore by the Government last month coupled with the headroom to raise about Rs 1,000 crore as Tier-II (subordinated debt) capital will support business growth, he added. The Government holds 79.5 per cent stake in the bank.

In FY2011, the public sector bank's business grew by Rs 10,000 crore to Rs 1,14,100 crore. In the reporting year, while advances grew by 16 per cent (or Rs 6,500 crore) to Rs 47,400 crore, deposits nudged up by 5.5 per cent (or Rs 3,500 crore) to Rs 66,700 crore.

“In FY2011, we took a deliberate decision to downsize high cost bulk deposits and focus on CASA deposits to protect our margins. On the advances side, we focused more on retail, SME and mid-sized corporates,” said Mr Sanghvi.

As of March-end 2011, CASA deposits comprised 40 per cent of the total deposits, compared with 37 per cent as of March-end 2010.

The bank has created a separate mid-corporate vertical to facilitate faster processing of loan proposals of up to Rs 50 crore.

To reach the stipulated provision coverage ratio (PCR) target of 70 per cent, the bank has sought time up to September-end 2011 from the Reserve Bank of India. As of March-end 2011, the bank's PCR stood at 60 per cent.

“We will reach the stipulated provision coverage ratio of 70 per cent before September. To achieve this target, we are going in for aggressive recoveries and settlement,” said Mr Sanghvi.

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