Bad debts caused by non payment of loans by small borrowers have caused a hike in the volume of NPAs of Bank of Baroda. The fact was stated by Bank of Baroda Executive Director R.K. Bakshi.
He said that most of NPAs occurred when small borrowers taking loans up to Rs. 50, 000 failed to repay the bank because of many reasons like non feasibility of the project or failure of crops or business. These loans also include Personal loans.
But Mr. Bakshi said that the bank’s NPA ratio is 0.31% which is superior to any other bank not only nationally but also similar to overseas benchmarks.
He also maintained that the bank’s financial position was robust and the bank is anticipated to do a business of Rs. 4 lakh crore by 31st March 2010.
Talking about increase in interest rate, Bakshi said that BoB may hike interest rates in another 2-3 months after considering the improving position of the bank’s credit portfolio.
Bakshi also hinted on BoB’s intentions to start another 350 branches throughout the country, including 11 in Jharkhand in 2011.
He said the bank would also hire 3,500 persons, including in the officer grade, by December 2010.