Rakesh Sethi in Calcutta on Wednesday. Picture by Kishor Roy Chowdhury
Calcutta, April 23: Public sector lender Allahabad Bank is planning to lend more to agriculture, MSME (medium and small enterprises) and retail as it seeks to make up for a slack in corporate credit that has caused it to miss its targets for last fiscal.
“There is hardly any new corporate proposal which has come around. What is really floating around is just refinancing proposals where they (corporate houses) are swapping their rupee debt with external commercial borrowings (ECBs). However, that has been stopped from yesterday,” Rakesh Sethi, chairman and managing director of the city-based bank, who took charge last month, said.
“Not that we are going to stop lending…it’s just (that the scope is) not available at the moment,” he added.
The Reserve Bank yesterday disallowed overseas branches of domestic banks from extending ECBs to manufacturing and infrastructure companies for repaying rupee loans.
Sethi said the bank had closed the year with a total business of Rs 331,000 crore, which included deposits of Rs 190,000 crore and advances of Rs 141,000 crore.
The bank had targeted a total business of Rs 360,000 crore with deposits and advances of Rs 205,000 crore and 155,000 crore, respectively.
Total business, however, grew around 7 per cent from Rs 309,678 crore in 2012-13, while deposits and advances grew 6.3 per cent and 7.6 per cent, respectively.
Sethi said business from the 2,800 branches of the bank across the country had not been satisfactory compared with its peers.
He said the Reserve Bank of India had approved its plan to infuse Rs 320 crore capital through qualified institutional placement (QIP). The bank is now awaiting clearance from the government. The process is expected to be complete by the end of June.
Set up in 1865, Allahabad Bank will celebrate its 150th year of establishment tomorrow.