Kapur: Looking ahead

Calcutta, Aug. 10: Vijaya Bank plans to raise its tier-II capital by Rs 250 crore in the fourth quarter of this fiscal in order to meet its credit expansion needs. The bank is also open to the idea of acquiring mid-sized banks in north and west India.

“The capital adequacy ratio of the bank is now a little over 12 per cent. After December, we will review the credit scenario and then raise tier-II capital,” chairman M. S. Kapur said.

The bank has entered the capital market twice. The government holding now stands at 53.87 per cent and another 2.87 per cent can be offloaded soon. “We have not decided on further dilution of the government holding,” Kapur said.

The bank has kept a business target of Rs 50,000 crore in the current financial year. It hopes to achieve Rs 31,000 crore in deposits and Rs 19,000 crore in advances.

The bank’s retail credit is showing robust growth. “Housing loan is one area which is growing at a fast rate. At Vijaya Bank, we offer customers a unique scheme for those availing of housing loans. If the loanee dies, the bank bears all the liability. There is an insurance coverage and the premium is paid by the bank. This scheme has further boosted our housing loan offtake,” Kapur added.

The home loan portfolio is expected to grow by another Rs 400 crore as VI Housing Finance, a wholly-owned subsidiary of the bank, is being merged with itself. The legal formalities are over and the bank is in the process of merging the operation of the housing finance arm.

Insurance business

Vijaya Bank will take a 12 per cent stake in the life insurance venture formed by Punjab National Bank, Berger Paints, Vijaya Bank and Principal of USA. The total capital base of the outfit is Rs 110 crore.