Dena bank to explore east for CASA and SME loans
Updated: Jun 18, 2013 01:27:43pm
Kolkata, Jun 18 (KNN) State-run Dena Bank plans to explore the rural and semi-urban economy of the eastern and north-eastern region which although less crowded has relatively higher growth opportunities, particularly in deposit collection in current and savings accounts and small sector lending.
Speaking at the inauguration of the 37th branch in Bengal at Kalikapur, Chairman and Managing Director Ashwani Kumar, said the bank was planning to restructure its operations in the east and add more branches to mobilise low-cost deposits, strengthen the CASA (current and savings account) ratio to total deposits and increase lending to small-scale sectors.
CASA deposits are less costly and rise in the ratio adds to profitability. On the asset side, banks earn better returns from SME loans.
Dena Bank plans to open at least 13 more branches in the east and northeast regions including five in the state in 2013-14. This region contributes just about 4 per cent or Rs 7000 crore of Dena's business of Rs 1.64 lakh.
Furthermore, the bank also plans to divide the Kolkata zone, which has 101 branches across seven states, into Kolkata and Patna as it increases its eastern focus.
West Bengal, Odisha and eight northeast states will come under the Kolkata zone while Bihar and Jharkhand will be managed by the Patna zonal office.
Of the proposed branches, five would be in West Bengal, while the North-East would get three.
“Nationally, West Bengal, Haryana and Punjab would be accorded additional focus,” Kumar said. The bank intends to utilise the farm and SME economy for growth.
In West Bengal, there are “un-banked” pockets, even close to the city. Having identified such an un-banked area just 30 km southeast of Kolkata, the group set up a usual and core banking branch there late last month. To their surprise, within 10 working days of opening, deposits swelled to Rs 4.71 crore.
“From a commercial perspective, this reconfirmed our bank’s view on the State and the region’s potential in rural and SME economy,” he observed.
The branch now covers a 134 sq km area of three panchayats in Sonarpur assembly constituency with 1.68 lakh inhabitants, largely lower in the social ladder and mostly engaged in agriculture or horticulture.
The bank has identified another such un-banked pocket in East Medinipur district in West Bengal. Majority of the planned branches in the State are in the interiors.
Currently, the bank has 37 branches in West Bengal and nine in the North-East. For better administrative benefits, it has planned to carve out a new zone, comprising Bihar and Jharkhand, to be headquartered at Patna.
Kumar said the lender is also focusing on Haryana and Punjab to improve its farm lending. In addition, the bank may add 150-200 branches this year across the country. (KNN)
Speaking at the inauguration of the 37th branch in Bengal at Kalikapur, Chairman and Managing Director Ashwani Kumar, said the bank was planning to restructure its operations in the east and add more branches to mobilise low-cost deposits, strengthen the CASA (current and savings account) ratio to total deposits and increase lending to small-scale sectors.
CASA deposits are less costly and rise in the ratio adds to profitability. On the asset side, banks earn better returns from SME loans.
Dena Bank plans to open at least 13 more branches in the east and northeast regions including five in the state in 2013-14. This region contributes just about 4 per cent or Rs 7000 crore of Dena's business of Rs 1.64 lakh.
Furthermore, the bank also plans to divide the Kolkata zone, which has 101 branches across seven states, into Kolkata and Patna as it increases its eastern focus.
West Bengal, Odisha and eight northeast states will come under the Kolkata zone while Bihar and Jharkhand will be managed by the Patna zonal office.
Of the proposed branches, five would be in West Bengal, while the North-East would get three.
“Nationally, West Bengal, Haryana and Punjab would be accorded additional focus,” Kumar said. The bank intends to utilise the farm and SME economy for growth.
In West Bengal, there are “un-banked” pockets, even close to the city. Having identified such an un-banked area just 30 km southeast of Kolkata, the group set up a usual and core banking branch there late last month. To their surprise, within 10 working days of opening, deposits swelled to Rs 4.71 crore.
“From a commercial perspective, this reconfirmed our bank’s view on the State and the region’s potential in rural and SME economy,” he observed.
The branch now covers a 134 sq km area of three panchayats in Sonarpur assembly constituency with 1.68 lakh inhabitants, largely lower in the social ladder and mostly engaged in agriculture or horticulture.
The bank has identified another such un-banked pocket in East Medinipur district in West Bengal. Majority of the planned branches in the State are in the interiors.
Currently, the bank has 37 branches in West Bengal and nine in the North-East. For better administrative benefits, it has planned to carve out a new zone, comprising Bihar and Jharkhand, to be headquartered at Patna.
Kumar said the lender is also focusing on Haryana and Punjab to improve its farm lending. In addition, the bank may add 150-200 branches this year across the country. (KNN)
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