Bank of Punjab's sop for Jammu

Interest rates on all loans reduced

The Bank of Punjab (BoP) has announced a lowering of interest rates on all kinds of loans by one percentage point, with a view to raking in a profit of Rs 1 crore at its Jammu branch.

"Jammu's is our best-managed portfolio and the ease with which we get recoveries here is missing at other places," the bank's senior vice-president (retail banking and marketing), Arvinder Singh, said after addressing a dealers' meet here.

"We have zero non-performing assets (NPAs) in Jammu. Therefore, we have decided to reward them lowering our interest rates on all loans in the Jammu branch by one per cent," he said.

Stating that last year the branch did a business of Rs 37 crore, Singh said the branch had been given the target of earning a profit of Rs 1 crore this year, and according to information received, half the target had been achieved.

"The Jammu branch has so far got deposits of Rs 40 crore, and has disbursed loans of Rs 20 crore, he added.

Singh said the Jammu branch had decided to start advancing educational loans, besides lending for even second-hand cars under its auto loan portfolio. The product head (educational loans), Lalitha Krishnamurthi, said only the Bank of Punjab provided educational loans of up to Rs 60 lakh.

Stating that the bank was considering the demand of local business circles for opening more branches in Jammu and Kashmir, including the Kashmir Valley, Singh said for the time being the bank would open extension counters in and around Jammu and instal off-site automatic teller machines (ATMs) in the state.

Singh said the bank was looking at vigorously promoting its products in the state. "Keeping in view the accelerating performance of the Jammu branch and its excellent credit-to-advance ratio, we are concentrating more on lending in the retail segment, such as educational loans, home loans, car loans, and loans against property."

While the bank has a universal business model by which all the advances are cleared centrally at the central processing cell in Gurgaon and disbursed in a decentralised manner, the Jammu branch enjoys a special status in the case of some retail lending portfolios, and these cases are handled locally.