Indian Bank would set up 15 exclusive branches to take care of its jewel loan business, and has set a business target of Rs 500 crore during the first year of operations.
T M Bhasin, chairman and managing director, Indian Bank, told reporters that this segment offers big potential to the bank with its existing loan book size from jewels at around Rs 4,400 crore. “To make the process easier and to tap the business, we decided to set up these exclusive branches,” said Bhasin. The new branches would be taken care of by exclusive staff.
He said the main focus would be on Tier II and III cities. “Compared to private players, our strengths are the fact that we are government-backed and the network we have,” Bhasin said.
On the bank's exposure to commercial real estate, which is at a level of Rs 2,022 crore as on date, Bhasin said Indian Bank holds assets two to three times collateral securities in these accounts. The repayment of instalments of principal and monthly interest in all commercial real estate borrowal accounts were on time, Bhasin said.
The bank also migrated to CBS-generated non-performing asset identification since the June quarter and has set up an online loan accounts monitoring department headed by a general manager at central office level, which generates auto alerts of the loan accounts, where the installments are falling due in next seven days.
“The system has proved very very useful and successful in stemming the rot of NPAs,” he said and noted that during the eight months' period this fiscal, the bank has recovered and upgraded NPA accounts worth Rs 550 crore, as against Rs 382 crore during the corresponding period last year.
The bank has issued notices under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (Sarfaesi) Act to all 10,156 eligible NPA accounts.
During the year, 2,796 cases were referred to Lok Adalats at 40 centres across the country through which compromise settlements have been reached in 1,221 cases unlocking Rs 30 crore from NPA accounts.
“The success ratio is 30 per cent in the Adalat system,” said Bhasin.
The bank aims to bring down the gross NPA to less than one per cent and net NPA to less than 0.5 per cent from from 1.45 per cent and 0.76 per cent levels in June 2010, said Bhasin.
