India Markets close in 3 hrs 29 mins

Bank of Maharashtra eyes 10% loan growth in 2017-18

Kolkata, Feb 17 (IANS) Public sector lender Bank of Maharashtra is aiming at a 10 per cent loan growth in the next fiscal, an official said on Friday.

"We are expecting to disburse about Rs 1.08 lakh crore of advances by the end of the current fiscal. We are aiming at least a 10 per cent growth in advances in 2017-18," said R.P. Marathe, the Bank's MD and CEO.

The lender has already raised Rs 500 crore tier-I capital and was expecting another Rs 500 crore from the central government before the end of the current fiscal (2016-17), he said, adding that broadly about Rs 1000 crore of additional capital would be required in the next fiscal.

Under the Indradhanush roadmap announced in 2015, the government will infuse Rs 70,000 crore in state banks over four years while banks will have to raise a further Rs 1.1 trillion from the markets to meet their capital requirement in line with global risk norms, known as Basel III.

Finance Minister Arun Jaitley in his budget proposal allocated Rs 10,000 for recapitalisation of public sector banks in 2017-18.

"Central's government support for recapitalisations will not be enough. Banks have to go for market to raise capitals," he said.

The bank posted a net loss of Rs 183 crore in October-December quarter as against Rs 337 crore during July-September quarter in the current fiscal.

The net losses were largely driven by higher provisioning requirements for NPAs (Non-performing assets) and a decline in operating profit both sequentially and year-on-year basis.

"We are expecting to achieve a break-even by end of the current quarter (January-March)," Marathe said at an interactive session organised by Merchants' Chamber of Commerce & Industry.

As a forward looking strategy, the bank is concentrating on the restructuring of its existing business model and the possibilities of mergering stagnant branches with adjacent branches along with rationalising its zonal offices.

"We have about 1600 branches and of which 400-450 branches are stagnant. We are exploring the possibilities to merger the stagnant branches with adjacent ones. We have 33 zonal offices and that can be reduced to 10 without affecting the business and customer services. There are parts of broad outlook and vision and nothing has been finalised," he said.

The lender received net deposit of Rs 9000 crore after demonetisation, he added.

--IANS

bdc/ahm/dg