ICICI Bank, the biggest private sector bank in the country has nurtured plan of expanding its rural and semi urban presence. It also intends to lower its exposure to personal loans.
Chanda Kochhar, MD and CEO of the bank said, “As we focus on enhancing our capabilities to serve our corporate and retail customers across India’s towns and cities, it is also our endeavour to proactively reach out to rural India and to the vast numbers of our people who do not have access to formal financial services”.
This intention of the bank is in accordance with its tactic to use its branch network to sell most of its loans without taking the help of direct sales agents. The direct agricultural loans of the bank were worth Rs 17,329 crore towards the end of March 2010.
ICICI Bank has a branch network of around 2000.
The bank had previously concentrated extensively on rural sector in 2005-06. But due to heavy losses incurred from the sector made it halt its march.
ICICI Bank was deprived of Rs 200 crore at the central and state government warehouses in Kolhapur district during 2006, where it had not hired third-party collateral managers.
These cases made the bank to reduce its rural loan book by 50% to Rs 10,000 crore by the end of September 2007 from Rs 20,000 crore towards the end of March 2007.