A recent press report said that Bank of Maharashtra (BoM) has planned to offload its entire mass of bulk deposits of Rs 9,000 crore by March next year in order to control cost and preserve margin.
Mr. Anup Sankar Bhattacharya, Chairman and managing director of the bank said that banks are facing rising cost of deposit as Reserve Bank of India following a tight monetary policy by raising interest rate to tame inflation.
Reports said that BoM’s costs of deposit stands at 5.88% while its net interest margin is at 3.18%. Mr. Bhattacharya said that the bank would like to maintain NIM at 3.15-3.18% level; it has also decided to offload its bulk deposit. The bank’s deposit growth will be moderate this year at 15%. It aims to grow its advances by 18% in 2011-12. The bank offers Term Loans, home loan, overdrafts, Letters of Credit, Guarantees and many more such products under its credit basket.
Mr. Bhattacharya said that the bank has requested the government for an equity infusion of Rs 800 crore to keep tier 1 capital above 8%. He also said that it would take care of the bank’s growth till March 2012. The capital adequacy ratio of the bank is at 13.35%.
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