Mangalore-based public sector lender Corporation Bank plans to shed bulk deposits worth around Rs 8000 crore by March 2013. Its present bulk deposits level stands at Rs 36,459 crore.
During the third quarter starting October 1 2012, the bank has shed bulk deposits worth around Rs 5,000 crore, a top official of the bank said here on Friday.
“As per the Reserve Bank of India guidelines, we are required to restrict the level of bulk deposits at 15% of our total deposits. Currently, our deposits stand at Rs 1,43,000 crore. As of now the bulk deposits account for 25.5% of our total deposits, and we would like to bring it down by another 7-8 percentage points by March 2013,” said Ashwani Kumar, Executive Director, Corporation Bank.
The bank presently has around Rs 13,959 crore under certificate of deposits (CD) and Rs 22,500 crore under bulk deposits. As per the RBI norms, the bulk deposits and CDs are required to be 15% of the total deposits, he told Business Standard.
Kumar said the average rate of interest offered by the bank on bulk deposits was 10.3%.
The bank plans to compensate the loss of bulk deposits by increasing its retail and current account savings account (CASA) deposits. Presently, the bank’s CASA level stands at 23% and the bank plans to increase it to 25% by March 2013.
In order to increase the CASA level, the bank has launched a campaign from July 16 to November 30 this year. So far, the bank has added 1.4 million new accounts under this campaign.
Kumar further added that the bank has seen a credit growth of 18% year-on-year as of September 30, 2012. Its advances grew by 18% to stand at Rs 96,000 crore while the deposits grew by 16-17% at Rs 1,43,000 crore.
The bank has also launched a campaign for small and medium enterprises (SMEs) for a limited period from October 20 to January 31, 2013 and is offering loan at a 50 basis points discount. During this period, the bank aims to sanction fresh loans worth Rs 5,335 crore, he added.