Worried over the rising slippage in credit recovery, the public sector Oriental Bank of Commerce (OBC) on Thursday said, it is adopting caution on fresh lending to sectors like steel, power and bullion.
“Closure of mines in Goa and Karnataka has stressed the steel sector and lack of policy clarity in the coal block allotment is delaying the power projects. Unless there is clarity in these sectors, it is difficult for the bank to decide whether to give advances to new players or not,” said SL Bansal, Chairman and managing director, OBC.
“It is worrying,” he said and added that the government has brought in amendments in policies to discourage lending to bullion sector to reduce gold imports.
The CMD was in the city for inauguration of 2,045th branch of the bank here and laid the foundation stone of the bank’s regional office building.
The PSU bank has a credit exposure of Rs 1,30,000 crore. OBC’s lending exposure to power and bullion sectors stands at about Rs 14,000 crore and Rs 1,200 crore respectively. While steel sector accounts for eight per cent of the PSU bank’s total credit exposure, other high value lending sectors are real estate (four per cent), road (six per cent) and priority sector (42 per cent)
Steel sector is still in the negative list, he added.
The bank’s gross NPA has risen to 3.41 per cent by June 30 compared to 3.27 per cent in March.
OBC plans to open more regional offices in Guwahati and Raipur etc. It also aims to open 125 new branches during the current financial year. Out of these, the bank has already opened 44 branches including 21 branches in unbanked rural areas.
In Odisha, the bank plans to open eight more branches by March 2014 and has set a business target of Rs 4,600 crore. The target includes Rs 3,000 crore deposits and Rs 1,600 crore advances. The bank clocked a business of Rs 3,600 crore in the state in 2012-13, which includes Rs 2,200 crore deposits and Rs 1,400 advances.
