MGM Gramin Bank plans to expand in Rajasthan

MGB Gramin Bank, one of the major regional rural Banks (RRB) working in Rajasthan, has decided to expand. The Bank has decided to open 8-10 new branches.

"We have decided to open two branches in Jalore district, two in Pali, two in Bikaner and one each in Hanumangarh and Sringanganagar district this financial year ending March 2008," MGB Gramin Bank Chairman MD Balani said.

He said the Bank planned to go for complete computerisation of the branch this fiscal. The Bank has so far computerised the working of its head office and area offices.

Balani said according to the audited financial statement, the Bank achieved a record business of Rs 1,797.39 crore for the fiscal ended March, 2007, showing an absolute growth of Rs 315.16 crore and record a growth of 21.26 per cent during the current fiscal. Our endeavour is to achieve a growth of over Rs 400 crore in total business in 2007-08, Balani said.

MGB Gramin Bank came in to existence on account of notification issued by Union ministry of finance, department of economic affairs (Banking Division) New Delhi dated June 12, 2006 and July 14, 2006 where in the government amalgamated Marwar Gramin Bank, Shriganganagar Kshetriya Gramin Bank and Bikaner Kshetriya Gramin Bank in to a single Bank called MGB Gramin Bank (Marwar Ganganagar Bikaner Gramin Bank) from June 12, 2006.

The Bank is operating with a network of 205 branches spread over six south western and north eastern districts of Rajasthan-Pali, Sirohi, Jalore, Bikaner Hanumangarh and Sriganganagar. Bank's deposits increased by Rs 133.36 crore to reach Rs 1,040.10 crore at the end of fiscal 2006-07.

Further share of low cost deposit stood at 46.47 per cent, which was the one of the major driver for achieving bank's profit.

According to the announcement made by the Union finance minister for doubling the flow of agriculture credit in three years, the Bank laid greater emphasis on issuing Kisan Credit Card and investment credit to increase its agriculture portfolio. Thereby agriculture advances reached at Rs 603.18 crore vis-à-vis level of Rs 447.78 crore on June 12, last year registering a growth of 34.74 per cent.

The Bank started its functioning with a Rs 582.21 crore outstanding advances and close its book for the financial year ending March 31 at Rs 756.39 crore, thereby achieved a chronological achievement by a net increase of 30 per cent in a span of 293 days.

The Bank has also succeeded in utilising its resources to tap the potential area of operation resulting in improvement of Bank's credit deposit ratio to 72.67 per cent as against the ab initio credit deposit ratio of 64.13 per cent.

Despite a pressure on financial margin, on account of hardening of interest rate, unidirectional upward movement of yield curve, acute competition and measures announced by RBI like enhance repo and reverse repo rate and lowering interest on CRR balance, the Bank's financial margin, operating profit margin and net margin stood at 3.42 per cent, 1.56 per cent, 1.27 per cent, respectively.