Bank of India’s robust loan pipeline of Rs 70,000 crore is set to enhance its credit expansion in the second half of the current fiscal year. Among these loan proposals, corporate loans constitute Rs 50,000 crore, undergoing various approval stages, and are expected to be disbursed in the coming months, said a top official of the bank.
“We have our credit pipeline of nearly Rs 70,000 crore, out of which around Rs 14,000 crore is the RAM pipeline, which is Retail, Agriculture and MSME (Micro, Small and Medium Enterprise),” Rajneesh Karnatak, managing director and chief executive officer, Bank of India told analysts in an earnings call.
“We have a certain pipeline in the international book also, and the remaining is the corporate credit pipeline, which is around Rs 50,000 crore,” he added.
This pipeline includes sanctioned loans, where documentation has either been executed or is yet to take place, and proposals, where the bank has granted in-principle approvals, with the proposals at various stages of sanction.
The robust loan pipeline is expected to aid the public sector lender in achieving a credit growth rate of 11-12% in the current financial year.
“We are very confident that there will be credit growth and with the busy season now kicking in for third quarter, the numbers will definitely be looking better in the quarter ending December on the credit side,” stated Karnatak. “We are confident that we will achieve the credit growth guidance of 11 to 12%,” he added.
Domestic advances of the bank increased by 9.80 % from Rs 4.12 trillion in September 2022 to Rs 4.53 trillion in September 2023.
The bank anticipates a robust recovery from bad loans in the second half of the current financial year. Various options, including selling stressed assets to Asset Reconstruction Companies (ARCs), launching settlement schemes, and approaching NCLT, will be explored to boost recovery.
“We are trying to do some transactions through ARCs. If it makes any sense to us where the sacrifice is low through the sale, definitely we will sell those assets to ARC,” said Karnatak. “NCLT is another option which is always there wherever the resolution under NCLT comes,” he said.
The bank has introduced four ‘very aggressive’ one-time settlement schemes for accounts that have already been written off.
The total recovery and upgradation of the bank in the second quarter amounted to Rs 1,638 crore. The bank successfully improved its asset quality during the second quarter, with Gross NPA (non-performing assets) decreasing to 5.84% from 8.51% in the same quarter of the previous financial year. In absolute terms, gross NPAs declined to Rs 31,719 crore as of September 30, 2023, from Rs 42,014 crore as of September 30, 2022.