Floods mar PNB's agri loan disbursement in Tamil Nadu

The agricultural loan business of Punjab National Bank (PNB) in Tamil Nadu was hit hard by the floods the state experienced towards the end of last year.

However, despite the adverse conditions in the agricultural loan segment, PNB had managed to hold its ground, said an official.

PNB's Tamil Nadu zone has disbursed about agricultural loans worth Rs 71 crore during the last nine months of the previous year. It disbursed loans worth Rs 81 crore in Tamil Nadu during the financial year 2004-05.

On the sidelines of a press conference, A Balasubramanian, general manager, PNB- Tamil Nadu Zone, said that the floods in the state during the months of October and November, 2005 affected disbursements of loans for the agriculture sector.

However, the tough run in the agricultural loan business may not affect PNB in a big way as a major part of its business is depended on the non-agricultural sector.

The Tamil Nadu zone had a credit outstanding of Rs 2,854 crore and a deposit outstanding of Rs 1,978 crore by the end of December 31, 2005. Advances to corporates occupy a significant share of the total credit of the zone while retail segment accounts for about 12 per cent.

An official pointed out that the relatively small proportion of agricultural business in the total portfolio of the bank is due to its limited branch network in rural areas. PNB has 106 branches in Tamil Nadu, of which, only 18 branches are in rural areas.

He pointed out that banks such as Indian Bank and Indian Overseas Bank (which were started in Tamil Nadu) have a larger presence in the rural areas.

Balasubramanian said that the zone expects to expand its presence to Rajapalayam, Neyveli, Hosur, Gopichettipalayam and Theni.

S M Veerappan, senior regional manager, Chennai, said that the bank is offering a 0.5 per cent discount on select loan schemes and a 0.25 per cent discount on housing loans for the festival season up to January 31, 2006. Upfront fee and documentation fee for loans availed during this period would be waived.

PNB has also launched a zero balance on savings account for students with an objective to attract young customers. Veerappan said that so far, about 7,000 students have availed themselves of the facility which was launched four months ago.