Braving the current downturn in the economy, the State Bank of India has targeted a 16.5 per cent growth in advances to Rs 1,28,000 crore in 2001-02 against last year's Rs 1,10,000 crore, said chairman Janki Ballabh. The bank recorded total advances of Rs 98,102 crore during 1999-2000.
Deposits, on the other hand, is expected to increase by Rs 30,000 crore in the fiscal over the last year. Around 60 per cent of the targeted deposits is expected from the personal sector. Deposits in the previous year totalled Rs 1,96,821 crore.
SBI, which will declare its 2000-01 results tomorrow, is expected to clock a Rs 5,000 crore operating profit. Of this, a total of Rs 3,000 crore is likely to be contributed by all its circle offices, while another Rs 2,000 crore is likely to be on account of treasury business.
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However, a Rs 50 crore provisioning on account of fraud and forgery, along with the provisionings for its voluntary retirement scheme as well as for its India Millennium Deposit, are likely to pull SBI's profits down to around Rs 1,600 crore from Rs 2051.55 crore in the previous year, said sources in the industry.
Advances in April and May this year took a Rs 2,000 crore dip compared to the corresponding period of the previous fiscal. Nevertheless, this is a seasonal fluctuation that will be made up in the subsequent months, Ballabh said. "With a timely and good monsoon we expect the economy to turn around this fiscal, and so will industrial production, although there was a dip in credit offtake in the first two months of the current year," he said.
Meanwhile, the largest commercial bank has targeted a total of Rs 8,000 crore disbursement in the housing sector against Rs 4,900 crore achieved in the last fiscal.
Thrust this year will be on personal line banking where SBI hopes to allocate 15 per cent of its advances for the purpose. Last year SBI loaned off Rs 13,343 crore, around 12.5 per cent of its total advances. It aims to increase its allocation to the sector on an incremental basis.
Educational loan disbursed by the bank stands at Rs 250 crore, while the bank has advanced Rs 200 crore on account of its pension schemes. Car loans, two wheeler loans, and consumer durable advances stands at Rs 625 crore, Rs 265 crore and Rs 600 crore.
Around 60 per cent of total loans, "Consumer loan is one area that provides stability to the bank. This sector is not very sensitive to interest rate fluctuations but its growth is a direct function of the quality service," explained Ballabh. "We will service our clients with improved technology like tele-banking and Internet banking," he said.
SBI is looking at improved services and increased coverage where it is trying to woo young customers who tend to move off to foreign banks. The bank is also planning to bring down the eligibility criteria of customers to increase its base and coverage.
Trade finance to mid-size corporates is another area which the bank is banking on. It has targeted high-end small scale units, and small corporate - mainly those which do not have access to funds through other avenues. Total advances targeted in 2001-02 to this sector is Rs 18,000 crore.