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Vijaya Bank has retired around Rs 7,200 crore of bulk deposits and certificate of deposits at the end of second quarter of this fiscal.
“The bank is making conscious effort to stop overdependence on bulk resources. It is time for us to reduce this over-reliance,” said H. S. Upendra Kamath, Chairman and Managing Director, Vijaya Bank, while announcing the bank’s ‘festival bonanza campaign’.
At the end of the second quarter, the bank’s bulk deposits and certificate of deposits to total resources stood at 38.9 per cent from a high of 46.6 per cent in the first quarter.
Banks normally offer higher rate of interest on bulk deposits/certificate of deposits than retail deposits. Vijay Bank is replacing bulk deposits with retail term deposits.
“It is a good, long-term bet we are taking. It is beneficial for growth and profitability of the bank. It also helps protect and improve net interest margin in the medium/long term,” said Kamath.
Festival bonanza
Vijay Bank has launched three schemes to shore up both deposits and advances.
V-Vaibhav is a one-year term deposit scheme with interest rate of 9.30 per cent. “In the first-nine days of launch, the bank has mobilised Rs 450 crore and has set a target of Rs 7,000 crore,” said Kamath.
Under the ‘Vijay Home Loan’ scheme, the bank has set a target of Rs 600-700 crore loan disbursals. Through ‘V-Wheels’ (auto loans), it plans to lend Rs 7,000 crore.
Deposits, advances
At the end of the second quarter, the bank’s deposits, at Rs 85,178 crore, were Rs 2,100 crore more than at the end of the first quarter. Advances were also higher by Rs 1,200 crore at Rs 59,802 crore.
The bank’s total priority sector advances improved by 13.5 per cent to Rs 17,822 crore as against Rs 16,700 crore in Q1. In Q2, retail lending, at Rs 12,116 crore, was 17 per cent more than in Q1 .
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