Mangalore based, Karnataka Bank is restructuring stressed loans to the amount of Rs 300-350 crore. In fact the bank has also started receiving proposals from borrowers across the various sectors but a final decision would only come in the bank's asset liability committee to be held on May 2nd.
Karnataka Bank's Chairman, Ananthakrishna said, "We have identified certain sectors like real estate and textiles that are under stress and decided to restrict our exposure to borrowers in these sectors. We are studying the cash flow position and repayment capacity of borrowers in these sectors and rework repayment schedule for them."
The bank is going to restructure loans under stress as per the RBI directive, added Ananthakrishna. The bank is planning to take some measures relating to specific sectors and also offer two years repayment extension for loan tenure of 5 to 7 years. The extension would depend on factors like the repayment capacity of the borrower and the interest burden he has to bear.
The bank has decided to not extend any fresh loans to real estate and textile sector as it has already given 7% and 15% of its total lending to real estate and textile respectively. As on March 31st, 2009, total lending of the bank stood at Rs 11,800 crore. Out of this, 14% were extended to SME sector, 7% to real estate, 15% textiles, 40% to priority sector and the remaining to the corporate sector.
Andhra Bank reported a year on year growth of 14% to Rs 32,000 crore in its total business during 2008-09. The advances increased by 9% to Rs 11,800 crore and the deposits grew by 17% to Rs 20,200 crore. The net profit of the bank stood up at Rs 280 crore, a growth of 16% over the previous year.
For the current year, the bank is targeting a growth of 20% to Rs 39,000 crore in its business. The main areas of focus for the bank will be retail credit, SMEs, infrastructure and capital goods sectors.
However the bank would have to raise around Rs 200 crore during the second half of the fiscal in order to maintain the capital adequacy ratio above 11%.
Meanwhile the bank is on an expansion spree and plans to set up 28 new branches and 30 ATMs during 2009-10.