Indian Bank eyes 25% credit growth

Indian Bank expects to achieve a credit growth of 25 per cent and a deposit growth 20 per cent in the current financial year to touch an overall business of Rs 93,000 crore by the end of March 2008 as compared with Rs 86,000 crore as at the end of the second quarter.

Speaking to the media on the sidelines of the launch of its microcredit branch in Hyderabad on Tuesday, MS Sundara Rajan, chairman and managing director, said the bank's overall financial position including a healthy credit deposit ratio of 59 per cent and capital adequacy ratio of 14.47 per cent would help achieve the targets for the current year. He ruled out going in for tier-2 capital as the tier-1 capital itself is 12 per cent.

Explaining about the bank’s microcredit initiative, he said the bank hoped to increase the microcredit disbursement to Rs 1,000 crore by the end of March 2008 from Rs 640 crore outstanding as on date.

“The rate of interest charged by a private money lender who normally gives a loan of Rs 90 in the morning and collects Rs 100 in the evening works out be 317-fold higher compared with 11.5 per cent the bank charges,” he said.

The bank would be ready to face all the challenges under Basel II norms from next month onwards.