Allahabad Bank has initiated measures to implement the new capital adequacy framework in line with Basel II guidelines by March 2008.
KOLKATA: Allahabad Bank has initiated measures to implement the new capital adequacy framework in line with Basel II guidelines by March 2008.
As part of this, it has decided to commence rating of corporate borrowers through domestic credit rating agencies.
A C Mahajan, chairman and managing director, said, “The process of execution of deals with rating agencies like Crisil, Care, Fitch and Icra is on.
“As part of the Basel II initiatives, we have put in place board-approved policies on rating of claims under credit risk by external rating agencies, credit risk mitigation and collateral management, and disclosure policy”.
“We are also updating and fine-tuning various systems and procedures, MIS technological capabilities, risk management structure for a smooth transition to the Basel II environment”, Mahajan said.
Following the injection of Rs 500 crore of Tier 2 capital, the bank’s capital adequacy ratio has gone up from 12.71% in the quarter ended June 30, 2007 to 13.01% at the end of September, 2007 quarter.
Overall, the bank has targeted a 20% growth in deposits at Rs 70,000 crore. Excluding the low yielding inter-bank participatory certificate, the growth in advances has been pegged at 25% to Rs 50,000 crore.
The bank has decided to go slow on bulk deposits and gone in for increasing its current account-savings account base. During the year from September 2006 to September 2007,
114 additional branches were opened, taking the total to 2134. Mahajan said the bank would add 116 branches this year.
Fee-based income increased from Rs 75 crore to Rs 101 crore in the last three months and the pace of growth is expected to be the same over the next few months. The bank recently opened depository services at New Delhi.
It now offers these services in Kolkata, Mumbai under NSDL and Lucknow, Kanpur and Varanasi under CDSL.
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