Chairman and managing director O. N. Singh at Allahabad Bank’s 140th year celebrations in Calcutta on Saturday. Picture by Kishor Roy Chowdhury

Calcutta, April 24: Allahabad Bank plans to do business worth Rs 1 lakh crore by the end of fiscal 2005-06.

This fiscal (2004-05), the bank hopes to bag business worth Rs 61,000 crore which includes 40,000 crore in deposits and Rs 21,000 crore in advances, said chairman and managing director O. N. Singh.

Singh said the bank hopes to bring down bad assets to 1 per cent by March-end next year. Then the bank would be able to declare dividend according to the Reserve Bank’s guidelines.

Only banks that have a capital adequacy of 11 per cent and bad loans (NPAs) less than 3 per cent of their assets can declare dividends without prior Reserve Bank approval.

The NPA of Allahabad Bank as on December 31, 2003, stood at 4.17 per cent.

Singh said the total business this fiscal is estimated to cross Rs 48,000 crore — a growth of more than 22.5 per cent over the previous year. The audited results for 2003-04 are yet to be announced.

The bank, which is celebrating 140 years of operations, will introduce core-banking solutions (CBS) at its 400 branches by 2006. In the current financial year, the bank hopes to introduce core-banking solutions in 100 branches.

The bank will spend Rs 300 crore for technological upgradation. It also plans to launch debit cards in collaboration with Visa.

To celebrate its 140th year, the bank has launched an insurance-linked product for the savings bank depositors.

Under the scheme, all savings bank account holders maintaining a monthly average balance of Rs 5,000 would be provided with a free personal accident insurance cover of Rs 1 lakh.

The retail banking boutiques have spearheaded the loan disbursements of Allahabad Bank during the last few years. The number of boutiques as on March 31, 2004, stands at 257 with a retail credit portfolio of more than Rs 2,200 crore.

Singh added that another 100 boutiques would be added in the current fiscal.

The bank is also planning to open rural boutiques in the form of Gramin Vikas Kendra (GVK) — the rural counterpart of retail banking boutiques.

The Gramin Vikas Kendras will be special delivery-cum-consultancy channels to augment flow of credit to agriculture and small and medium enterprises.