Andhra Bank on global exapnsion spree

Andhra Bank has drawn up an ambitious overseas expansion plan and is foraying into the US with a branch in New Jersey.

"We have filed papers with the US regulators (Federal Reserve and the State Banking Board, New Jersey) for opening a branch in New Jersey and are waiting for the licence". It is also eyeing to expand in Kuwait, Saudi Arabia and Oman in West Asia.

As a part of its technology upgrade initiative, the public sector lender is set to kick-start the process of migration to the core banking solution (CBS) from April 2008.

Initially, it would be started in 25 sample branches on a pilot basis and then be expanded to 530 branches in a phased manner, said Andhra Bank Chairman and Managing Director K Ramakrishnan.

The bank, meanwhile, has finalised a memorandum of understanding (MoU) with Hewlett-Packard (HP) for implementing comprehensive CBS across the country based on Infosys' Finacle package.

He said the bank intended to reach the doorstep of the customer through technological innovation. CBS initiative aims to serve the clients in a better way, while helping to reduce the operational costs.

The process of migration to the CBS platform would be expedited once the pilot project was completed, he pointed out.

Stating that competition was the order of the day, the Andhra Bank chief said the bank was laying maximum emphasis on availability of credit at affordable cost and improvement in the customers' service. "Competition will be there, but we want to maintain our market share," Ramakrishnan said.

Similarly, as a measure to add value to customers' service, the bank has introduced mobile ATM service in Hyderabad. Under it, a van equipped with an ATM machine goes to the identified places, where there is no branch of the bank, at a particular time. This is helping the customers in the suburb areas, he said.

On introduction of new products, he said, the bank is planning to launch some technology based products. Though it has finalised the reverse mortgage scheme for the senior citizens, it is awaiting the tax clarifications from the Central Board of Direct Taxes (CBDT). Once the clarifications are obtained, the bank will roll out the product.

The bank, which intends to make a foray into the non-life insurance sector, is in the process of roping in a foreign partner having all-round expertise in this area for the proposed venture.

"This sector provides vast opportunity and our captive customer base will be beneficial," he said. However, he did not reveal the details of the progress made so far. Andhra Bank has more than 15 million customers in the country.

As of September end, the bank had a total business of Rs 74,928 crore, recording a growth of 33.53 percent over same period last fiscal. While the deposits increased by 36.66 per cent to Rs 44,434 crore, loans and advances increased by 29.21 per cent to Rs 30,494 crore.

Similarly, the net profit of the bank increased by 11.2 per cent to Rs 292.3 crore, Ramakrishnan said.