Buoyed by the improvement in the loan growth in retail, agriculture and MSME (RAM) segment, Bank of India is planning to expand its loan portfolio in these segments in the current financial year. Within the RAM segment, the retail loan portfolio of Bank of India witnessed highest growth, followed by agriculture and MSME sectors. The bank’s corporate loan portfolio remained in the range of Rs 1.22-1.29 trillion in the four quarters of FY22.
The growth in retail loans came from home loans and vehicle loans, which are the top two contributing segments to its retail portfolio. Home loans, which contribute the highest to the bank’s retail loan portfolio, grew by 13.5% in FY22 to Rs 43,788 crore. Vehicle loans grew by 50% to Rs 10,353 crore. The bank has tie-up arrangements with car manufacturers such as Maruti Suzuki, Tata Motors, Hyundai Motors and Mahindra & Mahindra to boost vehicle loans. The personal loan segment also grew by over 100% to Rs 5,483 crores. This led to a 18.5% growth in the overall retail loan segment in FY22.
Under agriculture, the bank’s total outstanding as on March 31 grew 12.5% on year to Rs 66,418 crore. The bank issued 1.86 lakhs Kisan Credit Cards (KCC) with credit limits of Rs 2,565 crore for flexible credit utilisation. Loans to the MSME sector grew by 9.5% on year to Rs 69,462 crore.
The bank is also planning to launch a host of digital initiatives in FY23, which includes installation of micro ATMs, bulk UPI Payments to corporate and the government entities, integration of digital products under one application and addition of loyalty rewards programmes in mobile banking.
The bank is also planning to contain funding costs by improving its current account, savings account (CASA) ratio. As of March 31, the bank’s CASA ratio improved by 9.26% year-on-year.
The lender is also taking steps to bring down the non-performing asset ratio (NPA). The bank is in the process of updating its loan slippage predictive programme to a user friendly version which will provide more focused information. The bank will shift the monitoring of the special mention accounts (SMA) to the respective branches directly and is also developing an automated system for managing SMA portfolio, which will cover SMA risk gradation, collection action, geo tagging and real time analysis. The bank’s asset quality has shown improvement in FY22 in terms of gross and net NPA and fresh slippages.