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AllBank picks gilts for buyback scheme

Calcutta, June 30: Allahabad Bank has picked illiquid government securities (gilts) worth Rs 700 crore for the government’s debt buy-back programme, starting July 7.

Addressing the newspersons today, bank executive director K. K. Rai said: “The exercise will help us in three ways — clean up our balance sheet, get liquid statutory liquidity ratio (SLR) securities and reap tax benefit.”

Rai was silent on the discount the bank was ready to accept the government under the buy-back scheme. “Let’s see what the government has to offer us,” he added.

The Calcutta-based bank told the annual general meeting today that the business target for 2003-04 has been set at Rs 44,300 crore, up from Rs 38,600 crore in 2002-03, under a business plan drawn up for this fiscal. The actual business last year topped the target at Rs 38,950 crore.

The bank expects a deposit growth of 13.1 per cent to Rs 28,800 crore in 2003-04 against Rs 25,463 crore in the previous year. Advances should rise 14.9 per cent to Rs 15,300 crore from Rs 13,487 crore in the previous year.

As part of the fight against bad loans, the bank has fixed a goal of reducing net non-performing assets (NPAs) from 7.08 per cent to less than 5 per cent in 2003-04.

To boost credit, a new scheme for loans against mortgage of immovable properly, and a low-cost insurance scheme for the depositors in collaboration with Life Insurance Corporation of India, are on the cards.

The bank would offer loans against mortgage of residential properties at the prime lending rate of 12 per cent and lend against commercial properties at 13 per cent.

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