Central Bank sees deposit growth at 20% for FY08

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H A Daruwala , Chairperson and MD, Central Bank , said deposit and credit growth for FY08 is seen at 20% and 24% respectively. The bank will improve its net interest margins in FY08, she said, adding that NIMs are seen higher this fiscal from the current 3.16%.

 

According to Daruwala, fee based and banker products will increase. The bank is targeting net NPAs below 1% for FY08 as compared to the current 1.7%, she added.

 

Excerpts of CNBC-TV18's exclusive interview with H A Daruwala:

 

Q: Start off by telling us a little bit about what you hope to do by way of growth in advances and deposits over the next financial year, FY09?

 

A: For '08 we have already progressed that we would be doing our deposits at the growth rate of 20% and our credit at the rate of 24%. We are at 65% with our credit deposit ratio, and we have all intensions of going much more.

 

It is not that 20-24% are sacrosanct figures; we would definitely be crossing them because in the last year '07, we had done deposits of 25% and advances of 35%.

 

Q: What about your net interest margins, where do you see lending and borrowing rates moving in the next six to nine months, and what kind of NIM picture would you have this year?

 

A: We are very confident that we would be improving on the Net Interest Margins or NIM also. We have taken all possible steps to ensure that our income increases and our expenditure positively decreases. My operational expenses and my establishment expenses are already below by about 1.76% and 7.76% respectively. So I am equally confident we will be curbing on our expenditure.

 

On the other hand, the fee based income and our banker assurance products are what we are marketing in a wide way. So we are also equally confident that our other income will also increase. With that, we are confident that we would be in a position to have a better NIM this year.

 

Q: Your NPA also has been moving quite a bit towards recoveries in the past two financial years. Where is it you think your NPAs would be at by the end of this financial year?

A: As far as the NPAs are concerned, we have not made it our business to write off a large amount. What we did write off last year was just Rs 334 crore as against the Rs 290 that we had projected. Our endeavor is to recover and we have been in a position to recover our NPAs.

Right now we are at 1.70% in our net NPAs. We are equally confident we would be coming down to less than 1% in '08. So we have put into practice the monitoring officers, we have also put into practice the loan review monitoring schemes. We are looking into the ES and the SMA accounts with a very fine microscope.

 

We are very confident that we would be arresting the slippages, as also making recovery of our NPA accounts as also the recovery in our written off accounts, prudentially written off accounts.

 

With all that, we are absolutely set and geared to ensure that we do recover what is it that rightly belongs to us, and which should have been recovered in the past also.