The Hindu : Business : Vijaya Bank to expand core banking network

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Wednesday, Jan 26, 2005

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Business

Vijaya Bank to expand core banking network

By Our Special Correspondent

THIRUVANANTHAPURAM, JAN. 25. V ijaya Bank hopes to bring 400 of its branches under the core banking network by the end of the next financial year, the bank's Chairman and Managing Director, M. S. Kapur, said.

This means that, by the end of 2005-06, nearly 80 per cent of the bank's total business would be done by branches that have core banking solutions, he said. Thirty-five branches are already in the network. Within the next couple of months, this number will go up to 60, he said.

At a press conference here today, he said the bank was now focussing on increasing its lending to the farm sector in line with the Union Government's policy of doubling farm credit in the next three years.

Mr. Kapur was here in connection with the opening of the bank's new branch in the city, which is the 893rd branch of the bank in the country.

On the decline in net profit of most of the banks, he said this was due to a fall in trade profit and the higher provisions the banks had to make for portfolio appreciation. However, this is only a temporary setback as there has been, of late, an increase in the interest income of the banks, he said.

He said the practice of lending at below the prime lending rate to big-ticket clients like blue-chip companies would serve only to weaken the banking system. Such clients are, actually, in a position to pay higher interest rates for their borrowings.

He suggested that the banks should be allowed to fix their own PLR and once they did it, they should not be permitted to lend below that rate.

Export finance by banks is poised to pick up substantially in the coming years, according to Mr. Kapur. The dismantling of quota system under the multi-fibre arrangement would push up textiles exports from the country and this, in turn, would lead to substantial growth in export credit extended by the banks, he added.

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