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Saturday, February 22, 2014

Oriental Bank of Commerce to go slow on large advances, bulk deposits

With the banking industry grappling with corporate loans turning bad, the state-owned Oriental Bank of Commerce has decided to go slow on chasing aggressively bulk deposits and providing advances to corporates.

"We are not chasing bulk deposits as well as going for large corporate advances unless there is a very good asset for the time being," OBC Chairman and Managing Director S L Bansal said.

He said slippages during the first nine months of the current fiscal were Rs 2,800 crore, while the recovery was Rs 1,300 crore.

"Recovery continues to be a challenge. The large corporate accounts are stressed while small accounts are okay," he told reporters at a news conference here today.

Bansal said sectors like steel, road, and power were stressed. "Certain SMEs are also stressed as large corporates are not making timely payments to them," he said.

To carry on the banking activity, he said the bank was foscusing mainly on retail deposits and retail advances like home, education and others.

"Our aim is to maintain health of the bank," he said. Bansal said NPA reduction of the bank would take some time. Gross NPA of the bank stood at 3.87 per cent.

The bank has also decided to sell Rs 250 crore worth NPAs to ARCs (asset reconstruction corporations).

OBC had set a target business of Rs 3.5 lakh crore for the current fiscal. Presently, the business mix was Rs 3.20 lakh crore.

Source: Economic Times


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