This is how Central Bank of India plans its retail biz
State-owned Central Bank of India is pushing ahead with plans to expand its retail presence with a kitty of diverse products. According to Ram Sangapure, General Manager – retail, it is eying 45% retail growth in FY13 to be driven by special loan scheme for micro, small and medium (MSME) sector, mortgage, home and gold loans.
Moneycontrol Bureau
State-owned Central Bank of India (CBI), according to some market analysts, continues to be a conservative lender. The bank reported a net loss of Rs 105 crore in Jan-March quarter as against a profit of Rs 133 crore in Q4, FY11. But the bank is pushing ahead with plans to expand its retail presence with a kitty of diverse products. According to Ram Sangapure, General Manager – retail, Central Bank of India, it is eying 45% retail growth in FY13 to be driven by special loan scheme for micro, small and medium (MSME) sector christened as Cent Sahyog, mortgage, home and gold loans. Retail business grew by 40% in FY12."As on March 31, 2012; retail business formed around 12% (at Rs 17,500 crore) of the total loan book as against 10% a year back. We aim to make it 13.5% in FY13. At the same time, we would bring down the gross NPA ratio to around 3%. We have already cleaned our book and reduced our gross NPA ratio to 5% of the retail book compared with 10% a year ago," he told Moneycontrol.com.Cent Sahyog was launched in October, 2011. Under this scheme, loans upto Rs 1 crore are given out without any security but with an insurance cover, provided by Small Industries Development Bank of India (SIDBI). The premium of the insurance is included into the principal loan amount. Hence, if loans become non-performing asset, the insurance company will reimburse the loan to the bank. CBI has so far disbursed Rs 225 crore since its launch and plans to take it to Rs 1,000 crore by March, 2013.Moreover, home loans and mortgage loans are two different categories in CBI. While the former is simple credit to buy homes, the latter is loan given for different usage but with collateral in the form of property. Gold loan portfolio stood around Rs 355 crore as against Rs 200 crore in the previous year. During the year it disbursed Rs 700 crore home loans taking the portfolio to Rs 6,739 crore. Loans against property or mortgage loans shot up nearly three times to Rs 3,555 crore. "In home loan segment, we are coming out with advance disbursement facility. In this case, we will disburse a loan in only one-go, not depending on different stages of construction work. For this, we are tying up with big builders whose projects will be duly approved by our bank," Sangapure said.The lender has already joined hands with two builders: Lodha and Wadia group. Moreover, it has shortlisted 10-15 builders for the same. Saikat Dassaikat.das@network18online.com Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
