Andhra Bank stops lending to power sector

Our Bureau Updated - November 28, 2011 at 09:52 PM.

andhra

Andhra Bank has stopped lending to the power sector as its exposure to the sector has reached 22 per cent of the total outstanding advances.

As on end-September 2011, the public sector bank's loans to the power sector was about Rs 16,625 crore, out of the total advances of Rs 78,454 crore.

Most of the loans have been sanctioned to State electricity boards and they are backed by government guarantee. These loans are standard assets. However, the bank is not taking any further exposure to the power sector, said Mr P. Nagendranath Rao, General Manager, Mumbai Zone, Andhra Bank.

So far, the bank has received a request from Rajasthan SEB for restructuring its loan.

The bank's Mumbai Zone is looking to increase its total business by over 9 per cent to Rs 37,000 crore by end-March 2012, from Rs 33,850 crore as on September 2011. The zone which has 91 branches spread over three states — Maharashtra, Goa and Gujarat — contributes about 20 per cent of the bank's total business.

CASA focus

This year the focus will be on low cost current and savings deposits. The bank is conducting special marketing campaigns to boost the proportion of CASA deposits in the total deposits, Mr Rao said.

As at September-end 2011, the bank's CASA deposits constituted 26 per cent of total deposits. To improve the CASA deposits, Mr Rao hinted that the bank may up the savings bank deposit rate.

Another focus area would be the small and medium enterprises segment, said Mr Ashwani Mittal, Deputy General Manager, Andhra Bank. The zone's exposure to the SME segment is about Rs 1,450 crore.

Published on November 28, 2011 16:11