The bifurcation of Andhra Pradesh is a good opportunity for banks to tap new business, according to A Krishna Kumar, Managing Director, State Bank of India.
Speaking to newspersons, after inaugurating the new premises of a branch here on Wednesday, he said: “The division of the State has been taken up with an objective of economic growth and this will create new business opportunities for banks.”
On Tuesday, the Lok Sabha passed the AP Reorganisation Bill facilitating the division of the State to create the new State of Telangana.
When asked about SBI’s preparedness, he said necessary measures would be taken. “Bifurcation of States is not new to SBI. We have dealt with similar situations on previous occasions,” he said.
According to CVR Rajendran, Chairman and Managing Director, Andhra Bank, the gains would be visible for banks when a new capital and further development takes place in the new State. “This will involve creation of new infrastructure on a large scale. Housing will expand. All this is an opportunity,” he said.
For now, the advantage for banks will be hassle-free business. “Normalcy, even in the Telangana region, will bring back business to us,” he added.
The three major banks in Andhra Pradesh — SBI, Andhra Bank and State Bank of Hyderabad — reported loss of business in the first three quarters of the current financial year in both the regions as disbursal of loans and mobilisation of deposits were affected due to frequent bandhs/agitations and loss of working days.
Now that the dust is expected to settle down, banks hope to get back to business as usual.