Record lending to sensitive sectors

Domestic banks have lent a record Rs 7,000 crore to the three sensitive sectors - capital market, real estate and commodity - in 2004-05.

The booming real estate sector got Rs 6,400 crore while the capital market received Rs 813 crore. However, lending to the commodity sector declined by Rs 250 crore.

Total advances by 32 banks under study to the three sensitive sectors rose by 34.2 per cent to Rs 27,130 crore in FY 2005 from Rs 20,209 crore in the previous financial year.

An upbeat realty sector has seen these banks' lending to this segment rising sharply by 61.4 per cent (or Rs 6,400 crore) to Rs 16,721 crore during the fiscal under review.

The share of realty in the combined advances to the three sectors also increased from 51.3 per cent in 2003-04 to 61.6 per cent in 2004-05.

Meanwhile, advances to the capital market grew by 39.5 per cent to Rs 2,869 crore. The decline in lending to the commodities sector was 3.2 per cent to Rs 7,540 crore.

The State Bank of India (SBI) leads with a Rs 1,874 crore increase in its advances to these sectors. Punjab National Bank is ranked second as it raised the advances by Rs 1014 crore.

UCO Bank (Rs 828 crore), Bank of India (Rs 685 crore) and Corporation Bank (Rs 644 crore) are other majors in the list.

However, Bank of India has been the biggest lender to the three sectors, with total advances to the tune of Rs 3,540 crore. Punjab National Bank (Rs 3,231 crore), State Bank of India (Rs 2,163 crore), Indian Overseas Bank (Rs 1,824 crore), UCO Bank (Rs 1756 crore), HDFC Bank (Rs 1447 crore), Oriental Bank of Commerce (Rs 1,404 crore), UTI Bank (Rs 1,201 crore) and Corporation Bank (Rs 1028 crore) were other big lenders to these sector.

Punjab National Bank had the highest advances worth Rs 2,920 crore to the real estate sector, which grew by 64 per cent from Rs 1,781 crore in 2003-04. Bank of India ranked second with Rs 2,836 crore.

BoI's advances to this sector grew from Rs 2,428 crore to Rs 2,836 crore. SBI's advances to the sector too rose 6.7 times to Rs 2,033 crore.

UCO Bank's advances to the commodities sector are the highest at Rs 755 crore. It is followed by Indian Overseas Bank (Rs 704 crore), UTI Bank (Rs 588 crore), Oriental Bank of Commerce (Rs 581 crore) and Indian Bank (Rs 533 crore).

The highest advances to the capital markets was from HDFC Bank at Rs 985 crore, followed by Bank of India (Rs 704 crore), IDBI Bank (Rs 210 crore) and UTI Bank (Rs 192 crore).