IOB upbeat on its agricultural lending segment this fiscal

Bank disburses Rs 411 cr under special farm credit package this Q1

Indian Overseas Bank (IOB) is increasing its thrust on agricultural lending during this fiscal and plans to double this segment over the next three years.

To ensure that the bank meets its agricultural lending targets, it is now giving special training to some of the staff on rural lending.

"Under the Special Farm Credit Package, the bank has disbursed Rs 411.36 crore during the first quarter of the current fiscal. Our agri lending constituted 18.18 per cent as of June 2004 and this segment is expected to grow further in the current fiscal," S C Gupta, chairman and managing director, IOB, told media persons here on Wednesday.

Out of the total 1,466 IOB branches in the country, about 37 per cent of the branches are located in rural areas.

"Our non-performing assets (NPAs) are very low on agricultural advances. In the backdrop of this advantage, we are putting more emphasis on agricultural advances across the country," Gupta explained.

"Out of the total branch network, about 67 per cent of the branches are in the southern states, 33 per cent branches are in the northern states and we have five foreign branches in Korea, Singapore, Hong Kong and Colombo. Every year we are adding 20-25 branches across the country depending on the demand," he said.

During the first quarter of the current fiscal, the bank's net profits touched Rs 174.6 crore as against Rs 138.78 crore during the corresponding quarter of the last fiscal. This year, the bank expects to grow by 17 per cent.

"In March 2000, our net NPAs were 7.75 per cent. This has now come down to 2.37 per cent in March 2004 and our aim is to reduce it to one per cent by the end of this fiscal," Gupta said.

Gupta said that IOB may look at accessing funds from the public markets for a third time some time after 2006.

"At present, we do not need the money. We may think about another public issue only after 2006. There is no immediate plan for another round of VRS. In fact, we are planning to recruit some probationary officers over the next three years," he said.