The Hindu Business Line : Corporation Bank to raise $98 m via overseas loans

Addressing newspersons here on Friday, the Chairman and Managing Director of Corporation Bank, Mr V.K. Chopra, said the bank had been permitted to avail itself of loans or overdraft from overseas banks of up to 25 per cent of its unimpaired Tier-I capital. The bank, which recently raised $100 million at competitive rates from overseas correspondents, can further raise around $40 million. The board has given its approval for this proposal.

Apart from this, the board has also given its approval to raise $58 million through overseas borrowings for funding the export credit in foreign currency.

Stating that it will give the bank more funds to lend, Mr Chopra said, "The intention is to bring down the cost of funds." Though the cost of deposits has gone up, the lending need is coming down.

Asked about the rates of interest for these funds, he said, "We are going to the market to raise this money at competitive rates."

The board has also approved the opening of its representative offices in Dubai and Hong Kong. The bank has already initiated steps for seeking approval of the Reserve Bank of India in this regard. Stating that 15 per cent of the bank's deposits are from non-resident Indians, he said most of these deposits are from the West Asian region. Asked if there will be any hike in home loan rates, he said the bank was not making any alterations in home loan interest rates.

Stating that housing loan continued to be one of the focus areas, he said the bank had a portfolio of more than Rs 3,000 crore in this sector.

Mr Chopra said the bank, which has given special focus to agriculture lending, has decided to raise its outstandings by at least 50 per cent.

He said that infrastructure is one of the areas the bank is trying to step up its total credit offtake. At present, the allocation for this sector is 6 per cent of the net bank credit. "We propose to raise it to around 9 per cent of the net bank credit," he said.

He said the bank will bring down the net NPA level to 0.5 per cent during the current fiscal.

The bank has set a total business goal of Rs 55,000 crore for this financial year. The bank plans to extend core banking solution to nearly all its branches this fiscal.

Asked about the implementation of real time gross settlement (RTGS) facility in the bank, Mr Chopra said the bank provides this facility at 130 branches across the country. The facility will be extended to over 350 branches during the current financial year.

Stating that the bank has signed an agreement with State Bank of India on sharing ATM network in the country, he said the arrangement is expected to become operational within the next fortnight. With this, the bank's customers will have access to more than 8,500 ATMs throughout the country.

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