Intro: R.K. Gupta, Executive Director, Bank of Maharashtra, discusses the bank’s Maharashtra-centric business operations:
Mehul Dani: What percentage of your branches and ATMs is in Maharashtra? Where does the state figure in national network?
R.K. Gupta: Currently, 1146 branches and 1246 ATMs of the bank is Maharashtra. The state accounts for 61.5% of branches and 66.66% of ATMs and is at the top in the state-wise network of the bank at the national level.
What is the total amount of deposits collected and loans extended by the bank in the current FY and what is the yoy growth?
We have collected deposits worth Rs1.336 trillion and extended loans worth Rs951.69 billion in this financial year. The deposits registered a negative growth of 5.59% (yoy) and advances 6.89% (yoy) in Q3 2017-18. We have shed bulk deposits and certificates of deposits. Similarly, we aimed to increase our retail lending portfolio in the year by reducing our corporate exposure thereby reflecting a negative growth in advances. The CD ratio of the bank as of Q3 2017- 18 is 59%. Maharashtra accounts for 69.52% of the total business of the bank in Q3 2017-18.
Which sectors to you expect to be the growth drivers for the bank in Maharashtra?
We foresee a number of sectors as growth drivers in Maharashtra on medium to long term basis. With the union government giving support in the form minimum support price in the budget 2018, agriculture and allied activities will be one of the growth drivers in the state. The state government too has allocated more than Rs 60 billion to boost agricultural activities in its budget 2018, which will help revive agriculture industry.
With the union and state governments offering their support for development of affordable housing projects, we expect it to be another key driver. Already, the state government in its last budget has declared to construct 55,000 houses for scheduled castes and scheduled tribes and has allocated Rs500 crore for the same under Ramai Awas Yojana. With the state government setting up Maha-Infra, a special purpose vehicle to fund infrastructure projects, it is expected to raise Rs1 trillion in the next 5 years to finance capital expenditure of key infrastructure projects.
Further, due to the surge in infrastructure and agricultural growth, service sectors such as hospitality, trade, transport, storage and communication, financing, real estate, business services, community, social and personal services, and services associated with construction are expected to grow on medium and long-term basis. With the implementation of RERA, we expect good growth in residential real estate on long term basis.
I also believe that with the teething problems of GST getting sorted out, MSME industries in the state engaged in auto, engineering, electronics, textile and defense will be on a growth trajectory.
Which sectors will be high on bank’s risk management radar? What is the share of NPAs in Maharashtra in the total NPAs of the bank in the current FY?
We had witnessed high slippages in the corporate advances in the last year and is therefore concentrating more on our retail portfolio to diffuse the risk arising from large ticket advances. The agriculture and manufacturing sector contributed significantly to NPAs in Maharashtra during last year. Debt waiver did contribute to the agri NPAs; however, with the measures announced in the recent budget for agriculture and MSMEs, we expect the sectors to be back on the growth trajectory in the medium to long term. The share of NPAs in Maharashtra in the total NPAs of the bank as of December 2017 is at Rs106 billion, which represents a yoy increase of 19%.
What is the market share of Bank of Maharashtra among all the banks in Maharashtra in 2017-18? How do you propose to increase it?
The market share of Bank of Maharashtra in the state among all public sector banks stood at 6.75% as of Q3 FY 18. We are looking forward to increasing this share by focusing our business opportunities in Pune, Nasik, Aurangabad, Thane, Nagpur, Kolhapur and Solapur. At the recent 3- day summit Magnetic Maharashtra, the state government had entered into an MOU with CREDAI for taking up affordable housing construction in the state. We intend to exploit this and try to make the best out of it.
