Public sector bank Oriental Bank of Commerce (OBC) is planning to open 80-100 new branches in this financial year. The bank has already received licenses from the RBI for 60 branches and will soon apply for 100 more branches across India.
OBC will open a representative office in Dubai by the end of December as it has already received regulatory permission from the UAE authorities. It has also sought the RBI’s permission to open a branch in Lahore. Moreover, the bank is looking at other countries such as Hongkong, Singapore and Africa.
The bank has decided against hiking the interest rates on education, auto and home loans (upto Rs 30 lakh), inspite of the recent hike in repo rate and increase in the cash reserve ratio.
Oriental Bank of Commerce Chairman and Managing Director, Alok K Mishra said, “In this financial year, we are planning to open 80-100 new branches across India. We already have licenses for 60 branches and would apply for 100 more branches very soon.”
He added, ‘Our focus would be SMEs, mid corporates and retail sector. So, in order to facilitate the corporate sector, we have plans to open 10 large corporate branches and 50 mid-corporate branches.”
With expansion on cards, the bank expects business to grow to Rs 1,65,000 crore in 2008-09. Further, it sees the deposits and credit would be increasing by 20 per cent in 2008-09. “We expect total business to cross Rs 2,00,000 crore and net profit to be around Rs 1,500 crore by 2010,” said Misra.
Commenting upon the net interest margin, he added, “Last fiscal year, the bank’s net interest margin (NIM) declined to 2.34 per cent compared to 2.7 per cent corresponding period last year. In present scenario, we find it very challenging to maintain the net interest margin.”
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He added that the bank has enough headroom to support its asset growth in 2008-09. He also added that the company will open its representative office in Dubai by the end of this year.
Commenting upon the hike in interest rate, he said, “ We are not going to raise interest rate on education loan, auto loan and home loan upto 30 lakh. The decision of the bank not to hike interest rate is likely to benefit thousands of the students, auto loan seekers and home loan seekers.
At present the Bank has a branch network of 1339 branches, 75 extension counters and 763 ATMs with business mix currently exceeding Rs. 1, 40,000 crore. The bank would be opening up 6 new branches in Punjab and 2 branches in Haryana in the current year. The concentration of Bank’s branches is higher in Punjab, Haryana, Uttar Pradesh and Rajasthan.