Chennai, Nov 30 (IANS) With many pawn brokers firms raking in good business by extending loans against pledged jewels, the state-run lender Indian Bank has decided to expand its operations with 15 exclusive gold loan branches in three months, a top official said.
‘Our board gave its approval three days back. The branches will be operational in three months time in the south region,’ Indian Bank chairman and managing director T.M. Bhasin told reporters here Tuesday.
He said the bank’s jewel loan portfolio is around Rs.4,400 crore ($1 billion) and this will grow by Rs.500 crore ($110 million) in a year. Loans of Rs.15,000-Rs.500,000 will be sanctioned within 30 minutes at these branches.
Queried about the arrest of some bank officials for bribery in sanctioning loans, Bhasin said there is no systemic failure and there is no need to panic. Indian Bank’s exposure to commercial real estate is around Rs.2,022 crore (less than $500 million).
‘The loans are against collaterals whose value is three times the loan asset.’
According to him, the bank had migrated to computer-generated system of identifying non-performing assets (bad or doubtful loans) in June this year to avoid the chances of it being suppressed by field staff.
Bhasin said the recovery of such loans for the current fiscal till November was around Rs.550 crore ($125 million) as against Rs.382 crore ($85 million) last year.
Notices under the the relevant legislation for recovery of bad and doubtful loans were issued to 10,156 accounts and 2,796 cases were referred to specified local courts at 40 centres.
Bhasin said the board has set a target of Rs.5 trillion ($110 billion) in total business (advances and deposits) and Rs.5,000 crore ($1.1 billion) net profit by 2015, along with 2,500 branches and automated teller machines (ATM) and 25,000 employees.
