Kerala Gramin Bank has returned ‘stellar performance’ during the last financial year (2017-18) and has retained the number one position among gramin banks in the country.

Nagesh Vaidya, Chairman of the bank, told BusinessLine that this was achieved despite the challenges posed by drought in nine out of 14 districts in the State during the period.

Rural economy focus

According to him, the focus on rural economy, particularly under credit, has helped the bank maintain its lead among other players.

“IT innovations are attracting new-gen customers to our fold in a big way. The National Payments Corporation of India acknowledged this by selecting us for the best performance award under the cheque truncation system.”

The bank’s operating profit rose by 50 per cent to ₹304 crore against ₹202 crore in the previous year. But net profit slumped 27 per cent to ₹73.46 crore (₹102 crore). This was due to higher provisioning on account of significant defaults in education loans. Provisions grew 150 per cent to ₹95 crore from ₹38 crore year-on-year. Net NPAs rose 30 per cent to 2.09 per cent due to educational loans.

Provisioning coverage

The provisioning coverage ratio (PCR), indicating the extent of funds a bank has kept aside to cover loan losses, is at 46 per cent . This provides the context to the lower net profit this year, which is despite a higher operating profit. It also reflects the management policy to ‘provide enough’ and enable branches to absorb ‘future shock’ rather than boost profit.

Regional Rural Banks are the largest lenders of educational loans in terms of both numbers and quantum, said Vaidya. This is natural, given their reach and the ease with which villagers are able to do business.

Kerala Gramin Bank management had taken a decision not to allow provocations in the educational loan sector to disrupt customer relations, though branches may have suffered in the process.

It lent ₹912 crore to over 32,000 students with a view to making higher education more accessible to meritorious, deserving and needy applicants.

The share of current accounts and savings accounts (CASA) in total deposits has improved to 36.35 per cent from 34 per cent in the previous year.

The priority sector portfolio was at 91 per cent against the mandated 75 per cent. Loans to the agricultural sector amounted to 63 per cent. Total disbursals were at ₹11,275 crore.

Focused steps have yielded a record recovery of ₹399 crore against the previous year’s ₹325 crore.

The bank was able to post improved numbers under all business parameters with total business touching a new high of ₹31,658 crore, said Vaidya. During the current financial year, it intends to open 10 new branches and set up two more regional offices for better connect between branches and customers.

Business target

It aims to reach total business of ₹35,500 crore and disburse fresh loans worth ₹17,400 crore. It also plans to finance 6,500 new self-help and 4,000 joint liability groups.

During 2017-18, credit grew at 18.82 per cent over the previous year, helping boost the credit-to-deposit ratio to 106 per cent, which is the highest in the State.

The bank issued over 1.60 lakh Kisan Credit Cards and disbursed ₹2,500 crore under the Housing for All initiative of the government.

The bank opened 15 new branches during 2017-18, taking the total number to 630. It managed to add six lakh new customers to boost the total strength to 81 lakh.

The bank has been a leader in technology absorption, with customers being provided with a range of tech products, including a Selfie Account app.

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