The Bangalore-based Vijaya banks applications for licences for 143 branches are pending before the Reserve bank of India (RBI). We have applications for opening 143 branches pending before the RBI and most of these branches are for northern, eastern and western regions, said Prakash P Mallya, chairman and managing director (CMD), Vijaya Bank. The bank has 620 branches out of its 929 branches located in the Southern India. The bank has plans to raise Rs 700 crore upper tier II and Rs 200 crore lower tier II by the end of the third quarter of the current financial year. We have headroom for raising Rs 900 crore worth of tier II (both lower and upper) bonds and plan to raise it by December 2006 at appropriate time, Mallya said. He further stated that the 10-year bond yield has strengthened in recent times and the bank might come out with the issue even in October.
Referring to the interest rate scenario, he observed, The interest rates in the medium to long-term should stabilise but in short-run there might be slight fluctuations. The bank targets to achieve Rs 80,000 crore business by March 2008 and further increase it up to Rs 1 lakh crore by March 2009, he said.
On credit growth, Mallya opined that infrastructure, manufacturing, power and services sectors would be driving the growth in advances and also retail credit will be robust as these advances have better yields. The assets and liabilities of the bank are properly matched and most of the advances are in the time bucket of 3-5 years, he said.
To shore up its deposit the bank would come out with a savings scheme with sops like insurance cover, free debit/ATM cards while the life insurance business venture is likely to take off by March 2007, he said.