Vizag Co-op Bank net up 54%

Visakhapatnam Co-operative Bank Limited (VCB) registered 54 per cent growth in net profits during 2005-06 at Rs 3.40 crore, compared with Rs 2.20 crore in the previous year.

The bank reduced its net non-performing asset (NPA) by 3.57 per cent. "As of March 2005, our net NPA was 4.83 per cent. This was reduced to 1.26 per cent by March 2006, a main reason for our improved net margins," Manam Anjaneyuly, president, VCB, told Business Standard.

The bank, he said, would lose around Rs 1 crore in the financial year 2006-07, due to the finance ministry's decision, which makes it mandatory for the banks to pay income tax.

VCB added another Rs 3 crore to its reserves during the year 2005-06. As of March 2005, its reserves stood at Rs 34.95 crore. "As we earned profits in the year 2005-06, we diverted Rs 3.12 crore to the reserves. With this, our reserves rose to Rs 38.07 crore by the end of last fiscal," he said.

He said the bank was giving more emphasis on offering other benefits to the shareholders in the name of welfare as the Reserve Bank of India had imposed restrictions on announcing high dividends. "Currently, the bank has been providing Rs 50,000 insurance cover on accidental death for all shareholders. We now want to extend this facility to even natural deaths," he said.

Apart from this, the bank is providing mediclaim benefit up to Rs 15,000 a year. It is planning to increase it Rs 25,000 a year for not only the shareholders, but also for their family members. VCB currently has 26,000 shareholders. The bank is planning to introduce educational loans to shareholders' children with 2-3 per cent less interest compared with other loans.