Thiruvananthapuram, July 8: A section of the shareholders of the State Bank of Travancore (SBT) have expressed concern over the growing volume of the bank's investments against its advances, SBT managing director Vepa Kamesam told a news conference immediately after the annual general meeting held on Wednesday. The growth of investments compared to credit was the result of economic recession resulting in industrial slow down and low credit offtake. The total investment of the bank went up to 32.49 per cent to reach a level of Rs 4,391.1 crore.On the other hand the total advances grew by only 6.28 per cent to touch Rs 4,251.90 crore in 1998-99. The income from investments grew by 28.09 per cent to touch Rs 475.93 crore.
Meanwhile, SBT will not shy away from financing public sector ventures promoted by the Kerala Government despite the fact that advances to the public sector enterprises in the state constitute 25 per cent of its non-performing assets.
Of the total NPA of Rs 800 crore, public sectorundertakings account for about Rs 200 crore. Despite the significant share of public sector in boosting the NPA, SBT will continue to finance new public sector units. It had already given Rs 20 crore to the Kerala State Power Finance Corporation (KPFC). The bank is also willing to contribute to the Public Sector Corpus Fund being set up the Kerala Government, once the details of the fund are made available. From the year 2000 onwards, the banks will have to make provision even for proper accounting of Government guaranteed advances in the balance sheet. However, the notable performance of the bank during 1998-99 was the reduction in NPA's from 12.21 per cent to 10.80 per cent though net profit declined from Rs 63.3 crore to Rs 43.44 crore in 1998-99.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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