Vizag Coop Bank eyes 'zero' net NPAs by March '07

The Visakhapatnam Co-operative Bank (VCB), the second largest co-operative urban bank in Andhra Pradesh, is targeting to achieve 'zero' net NPAs (non performing assets) by the end of March 2007.

"As on March 2005, our net NPA was 4 per cent. We hope to bring it down to 2 per cent by the end of this fiscal and aim to reduce it to 'zero' by March 2007," Manam Anjaneyulu, chairman, VCB, told Business Standard. To achieve the target, the bank has intensified the drive to recover bad loans besides tightening lending procedure.

The bank disbursed Rs 145 crore as advances by March 2005. It expects lending to touch Rs 170 crore by the end of this fiscal and Rs 200 crore by the end of March 2007, he said. "By the end of March 2007, we hope our deposits will grow to Rs 300 crore from the existing Rs 248 crore," Anjaneyulu added.

To improve the capital adequacy ratio, the bank is planning to increase its share capital . "Currently, the share capital stands at Rs 14.28 crore, which is the highest among the all co-operative urban banks in the state. By the end of March 2007, we plan to increase it to Rs 20 crore," he said.

The bank has been giving dividend and some interest to its shareholders on this share capital.

"In 2000-01, VCB declared a 40 per cent dividend (including interest) on share capital but in the last fiscal, it announced only 10 per cent dividend due to the restrictions imposed by the RBI," he said. At present, the bank has a total reserve of Rs 18 crore.