The Hindu Business Line : `Banks should focus on credit deployment'

THE Chairman and Chief Executive of the Aluva-based Federal Bank Mr K.P. Padmakumar perceived the need (for banks) `to go to the basics and focus on credit deployment' to the agriculture and small-scale sector.

"The obsession with the services industry must come down," he said.

Stating that he saw no great future if banks continued to fall back on the call money market, especially as the interest rates were witnessing a downslide, Mr Padmakumar said `the thrust should be on credit deployment. Banks should advance the manufacturing sector'.

He conceded that the industrial credit off take had fallen in recent years with the banks refocusing their thrust on retail lending, particularly in the home loan and personal finance segment and emphasised the need for turning back to the basic lending needs.

Reverting to performance, he said that the bank had achieved a total business of Rs 17,400 cr and was targeting to reach Rs 20,000 cr by March 2004. `The bank is confident of closing the just-ended fiscal with a net profit of over Rs 100 cr as against Rs 82 cr in the 2001-02 fiscal', he said. (The annual results are to be announced on May 16).

The Federal Bank Chief was in the city to preside over a function to announce the formal launch of two of its ATMs in the city. With this launch, the total number of its ATM moved to 140 (of which 131 were inter-connected), while the branch network stood at 421.

On expansion, he said that the bank proposed to add 18 more branches during the current year, with an eye on places that it had hitherto not spread its wings. He said that a petition was pending with the Apex Bank for opening of a representative office in Dubai.

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