Bank of Maharashtra (BoM) has set great store by growth in retail loans, including home, car and gold loans and government-guaranteed loans, among others, to grow its business. According to MD and CEO, AS Rajeev, there has been a pick-up in momentum in retail loans following lifting of/ relaxation in the pandemic-inducedlockdown across the country. In an interaction with BusinessLine , Rajeev emphasised that out of the bank’s total loan portfolio of ₹1,03,408 crore, only 2 per cent of the loans – whose business was impacted due to the pandemic – have come up for restructuring so far. Excerpts:

How is the demand for loans panning out?

There has been a pick-up in momentum in retail loans, which grew 34 per cent year-on-year (y-o-y) in the second quarter. Micro, small and medium (MSME) loans are up by 33 per cent. Agriculture portfolio has grown about 6 per cent. In the corporate and other segments, our portfolio has not grown much. While this portfolio has degrown a shade y-o-y, it is up about 6 per cent on quarter-on-quarter (q-o-q) basis. Gradually, corporates are utilising their cash credit limits.

Did you rejig the corporate loan portfolio?

We have changed the composition of the corporate loan portfolio. We have substituted a portion of this portfolio (about ₹4,000 crore to ₹4,500 crore) with government guaranteed accounts. So, our exposure to non-banking finance companies (NBFCs) has come down to 10 per cent of the total loan portfolio against 15 per cent earlier.

How big is your loan sanctions pipeline?

We have built up a sanctions pipeline of about ₹25,000 crore so far. Of this, we sanctioned loans aggregating about ₹6,000 crore in the first half of FY21. The loan mix between retail:corporate now is 60:40. We want to alter this mix to 55:45. So, we want to increase our corporate loan exposure by 5 percentage points.

Given that there could be slippages down the line in the case of accounts that have not been declared non-performing due to the Supreme Court’s interim order on deferment of asset classification, is the single-digit gross non-performing asset (GNPA) figure of 8.81 per cent sustainable?

Our GNPA was at ₹9,105 crore (closing level as of September-end 2020) against ₹15,409 crore in the year-ago quarter. So, GNPAs have come down by ₹6,304 crore. The number of accounts that are eligible for restructuring are about 28,500 aggregating ₹4,675 crore (only about 4.4 per cent of the total loan portfolio). As of now, not even 2 per cent of this eligible amount has come up for restructuring.

Recoveries and upgradation at ₹556 crore in Q2 FY21 were 82 per cent of the level in Q2 FY19. We are expecting recoveries of ₹600 crore to ₹700 crore in the current (Q3) quarter, and slippages could be almost equal to that. So, there will not be any addition in incremental NPAs in the current quarter and the next.

Our Special Mention Account-2 (principal or interest payment wholly or partly overdue between 61-90 days) portfolio, which could slip, comes to only ₹503 crore. We are monitoring this on a daily basis.

So, sustainability of the asset quality is very clear. Moreover, with the expected growth in advances, our estimate is that by March-end 2021, we can bring down GNPAs to below 7 per cent of gross advances.

What is the reason for the jump in gold loans portfolio?

Our gold loan portfolio has reached almost ₹1,000 crore now against ₹20 crore in Q2 FY20 and ₹200 crore in Q1 FY21. We are expecting a growth of ₹1,000 crore per quarter in this portfolio, taking the outstanding gold loan portfolio to ₹3,000 crore by March-end 2021. On an average, we are disbursing gold loans aggregating ₹20 crore to ₹22 crore per day. This will increase to ₹25 crore per day. The bank has 176 designated branches across the country for giving loans against gold ornaments.

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