Bank offloads around Rs 115 cr of NPA.
Bangalore-headquartered public sector lender Vijaya Bank has given a representation to the Ministry of Finance on further capital infusion in the bank in accordance with its expected business growth in future.
“Government has asked many banks, including us about capital requirements in line with our business growth. As per that circular, we have asked for certain quantity as part of the capital infusion from the government,” Albert Tauro, chairman and managing director of Vijaya Bank, said.
However, any thing concrete is yet to materialise, he added.
The public sector lender had received close to Rs 1,200 crore in the last one and half years from the government as part of the re-capitalisation plan.
“The capital adequacy ratio that stood at 10.12 in tier-I category, is enough for the bank and gives us a lot of leverage for credit expansion,” Tauro added.
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Meanwhile, the advances for the bank grew moderately by 13 per cent to Rs 41,948 crore during the first quarter of the present fiscal.
“Retail lending has seen sound growth with agriculture loan witnessing 13.65 per cent, and education loan growth at 23 per cent,” he added.
Referring to infrastructure lending portfolio, he said, out of the total Rs 42,000 crore portfolio, around 23 per cent was advanced to the infrastructure sector.
“Most of our lending in infrastructure is in the power sector in which state utilities are the major clients,” Tauro said.
There is less possibility of an asset-liability mismatch due to infra lending as interest rates are protected through floating rate of interest, he added.
He, however, said liquidity risk due to a higher infra portfolio had to be addressed by the bank.
Talking of NPA ratio, he said, “While net NPA was down to 1.35 per cent from 1.58 per cent a year earlier, gross NPA also witnessed a declining trend to 2.32 per cent from 2.94 per cent.”
The bank has also offloaded close to Rs 115 crore of NPA to an asset management company in its bid to reduce its non-performing assets.
“We have offloaded close to Rs 115 crore of NPA on two Delhi accounts to an asset management company,” a top company executive said.
She also said that the company got an attractive discount rate without divulging the name of the asset management company.