Public Sector lender Corporation Bank may take a call on lending rates by mid of October this year. "We are examining the current situation and most probably by middle of October will take a decision in this regard," said Ajai Kumar, Chairman & Managing Director, Corporation Bank.
The base rate of Corporation Bank currently stands at 10.5%. The bank slashed interest rates on home, car and educational loans with effect from September 1 for a three-month period. The state-run bank also waived the processing fee for these loans. Having launched special scheme for the festive season, the bank is targeting to have a business of Rs 3,000 crore in this season.
About the Net Interest Margin(NIM), he added, "Our NIM is 2.48% and it will be remain stagnant this fiscal years as our CASA growth is stagnant."
Having achieved a business of Rs 2,40,000 crore (advances Rs 1 lakh crore and deposits 1.4 lakh crore) by September this year, the Bank is hopeful to touch Rs 2.8 lakh crore business by this fiscal year. The Bank is expecting a deposit growth of 15% and 16% credit growth in the current fiscal.
In order to achieve the target, the Bank is aggressively increasing its exposure to retail and SME loan. He added, "Currently our retail exposure is about 19% of the total business. We are aggressively targeting retail loans and plans to increase our exposure in this segment as this sector has huge potential. Further, in order to extend our reach across India, we are planning to add 300 branches in the current fiscal specially rural and semi urban areas of Gujarat, Punjab, Rajasthan, Bihar, Orissa, Jharkhand in the existing network of 1,500 branches."
As far as SMEs is concerned, the Bank has drawn appropriate strategies for increasing credit to SMEs sector by launching specialised loan schemes, at attractive interest rates. The bank’s portfolio under SME sector as on March 31, 2012, was Rs. 14,340 crore as against Rs 11,642 crore as at March 2011. The Net Growth of SME credit was around 23%, aggregating to Rs 2,698 crore. Within the SME sector, the micro and the small enterprise portfolio increased from Rs10,707 crore as at March 2011 to Rs13,752 crore as on March 2012, accounting a net increase to the tune of Rs 3,045 crore [28%].
For the current FY 2012-13, the bank’s target under SME segment is Rs 18,300 crore, which is 14% of the projected Net Bank Credit of Rs 1,27,000 crore. Out of the targeted SME lending of Rs 18,300 crore, Rs 17,000 crore would be deployed under the micro and small enterprises.
With a view to catering to the SME segment in a big way, the Bank launched exclusive SME Loan Centres in various cities across the country. With the launch of Chandigarh SME Loan Centre – the total number of SME Centres have increased to twelve. The centres are located at Delhi, Hyderabad, Bangalore, Chennai, Coimbatore, Pune, Mumbai, Vadodara, Kolkata, Mangalore, Ludhiana and Chandigarh.
