Indian Bank plans branch in Jaffna

CHENNAI: The city-based Indian Bank is planning to open a branch in Jaffna in Sri Lanka. "Talks are in an advanced stage at the moment," chairman and managing director TM Bhasin said. A couple of months back, the bank had sent representatives to the region to evaluate the possibility of setting up a branch. Indian Bank already has a branch in Colombo and it is also looking at the possibility of opening a branch in Kandy as well as a representative office in Jakarta in Indonesia, he said.

The bank's net profit during the first quarter, ending June 2010, grew by 11% to touch Rs 368.15 crore. CASA (current account saving account) deposit as a percentage of the total deposits of the bank recorded a growth of 33.34% in the first quarter of the fiscal as against 30.39% during the corresponding period last year. In keeping with the focus of raising low-cost deposits, the bank has launched a supreme current account with a health cover.

Indian Bank's total business during the April-June quarter recorded a year-on-year growth of 24% to touch Rs 1,59,027 crore (Rs 1,28,700 crore). Of this, deposits accounted for Rs 91,000 crore, with advances constituting the remainder. The credit deposit(CD) ratio of the bank stood stood at 74.8% for the period ending June 30, as against 67.8% for the corresponding period in 2009.

While the net interest income of the bank rose by 25.6% on a year-on-year basis to touch Rs 926.65 crore in the first quarter of the fiscal, core non-interest income witnessed a growth of 54.4% during the same period to touch Rs 257.79 crore. While the bank's capital adequacy ratio (CRAR) stood at 12.5% during the same period, the ration of net non-performing assets (NPA) to net advances was at 0.76%.

"We have shifted to identifying NPAs through the online CBS (core banking solution) which would enable the bank track all NPAs and special mention accounts on a day-to-day basis," Bhasin said. "The accounts under the NPA category would be generated from the head office and the relevant branch office and circle office under which these accounts fall would be asked to push for recovery. Otherwise, a lot of time is wasted in identifying NPA accounts," said Bhasin.

With base rate coming into play, Indian Bank is planning to reprice its loans totalling Rs 6,000 crore which where under the bank's base rate of 8%. As per the RBI guidelines, banks cannot charge below the base rate for loans.

Source:http://timesofindia.indiatimes.com/city/chennai/Indian-Bank-plans-branch-in-Jaffna/articleshow/6212129.cms