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IDBI
Bank posts Q2 net profit at Rs 14.7 crore
Our
Banking Bureau
Mumbai, Oct 31: IDBI Bank, the banking arm of the Industrial
Development Bank of India, has reported a net profit of Rs
14.73 crore in the second quarter of the current fiscal ended
September 30, 2001, as compared to a net loss of Rs 10.10
crore in the corresponding period of last fiscal.
| IDBI submits
universal banking plan to RBI |
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New Delhi, Oct 31: IDBI has submitted
its plans for universal banking to the Reserve Bank.
It would finalise a partner bank within the next three
months, IDBI chairman P P Vora said here.
“We have in principle submitted our proposal for universal
bank to RBI,” Vora told reporters after meeting finance
minister Yashwant Sinha.
He said the financial institution would decide on the
bank with whom it plans to merge within the next three
months.
Some of the banks which figured for the merger proposals
are Bank of Baroda, Bank of India, Punjab National Bank
and Union Bank. Vora declined to comment on the bank
shortlisted for the reverse merger with IDBI. PNB chairman
SS Kohli said the bank wasnot in talks with IDBI for
the merger. RBI, in its Busy Season Credit Policy, has
given FIs the green signal to pursue universal banking
and has asked them to submit their proposals.
IDBI’s competitor ICICI has already decided to merge
with ICICI Bank to create a bank which would second
in size only after State Bank of India.
IDBI decided to go for universal banking after it faced
problems in mobilising low cost funds. The FI was also
hit by the pile of non-performing assets on account
of recession in industry.
The leading FI decided to merge with a leading PSU bank
as its banking arm IDBI Bank was too small in size for
the reverse merger.
Vora, who received the finance ministry’s nod early
this month about a smooth transition to universal banking,
said it was the roadmap that IDBI had prepared months
back.
IDBI and ICICI had approached government and RBI for
exemptions in fulfilling statutory obligations.
In a approach paper, FIs had asked RBI to treat infrastructure
loans as priority sector loans. They had also asked
the apex bank to treat Statutory Liquidity Ratio (SLR)
and Cash Reserve Ratio (CRR) on an incremental basis.
Apart from universal banking, Vora said the FI has made
loan exposure norms to a particular industry “stricter”.
— PTI
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Net profit during the first half stood at
Rs 32.95 crore, up from Rs 1.80 crore. Net interest income
in the second quarter grew by 204 per cent to Rs 44.10 crore
(Rs 14.50 crore), the bank said in a release.
Net interest income in the first half stood at Rs 72.80 crore,
reflecting a growth of 87 per cent.
Other income, constituting foreign exchange earnings, fees
and commission from other non-fund based banking activities
and money trading income, rose to Rs 22.63 crore (Rs 8.47
crore) in the second quarter.
The ratio of net non-performing assets to net customer assets
has been brought down to 2.76 per cent as compared to 3.57
per cent in the first quarter.
The bank continues to provide aggressively against loan losses,
well above the regulatory requirements. The bank has shifted
to NPA classification and provisioning on 90 days overdue
basis since the first quarter.
Net customer assets grew by 19 per cent to Rs 3,463 crore
as compared to Rs 2,906 crore as on June 30, 2001. Total deposits
grew by 14 per cent to Rs 3,912 crore.
The bank continues to focus on retail deposits which constitutes
39 per cent of total deposits. The low cost current and savings
deposits grew by 41 per cent to Rs 853 crore, as compared
to the corresponding period of last fiscal.
Recently, the bank made significant progress in setting up
regional processing centres to provide centralised operational
support to branches, allowing these to perform as full-fledged
sales and service units. It launched Internet banking to supplement
its existing mobile banking services and phone banking services.
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