Adur Pradeep, OP
The government owned Central Bank of India, one of the oldest and largest commercial banks in India, has registered significant growth in its MSME business in Odisha.
“There is huge growth in the MSME sector and we have achieved almost 92 per cent of our target by November,” Shishir Kumar Bhattacharya, the Senior Regional Manager of the Central Bank of India in Bhubaneswar, told Orissa Post in an interview recently.
Speaking about the bank’s performance in the state, Bhattacharya said: “In the agricultural sector we have almost achieved 49 per cent of our target by September.”
On the credit scenario for micro, small and medium enterprises (MSME) he said, “It is very good. With the advent of MUDRA (Micro Units Development and Refining Agency) and Stand-up India schemes, the government has launched a Credit Guarantee Fund too. All accounts are covered by the Guarantee Fund and bankers are comfortable lending money. Mudra loans are available in three categories. For small business, loans up to Rs 50,000 is available under the ‘Shishu’ category; beyond Rs 50,000 and up to Rs 5 lakh loans are given under the ‘Kishor’ category and beyond Rs 5 lakh and up to Rs 10 lakh it is given under the ‘Tarun’ category. A lot is being done in the ‘Shishu’ and ‘Kishor’ categories. Overall, the MSME sector has seen good growth.
Bhattacharya is also of the view that credit growth will improve by the fourth quarter of the current fiscal.
“Credit has already started picking up. Retail has improved…industry has not yet picked up. I expect things to be better by the fiscal’s fourth quarter.”
Coming to Central Bank’s expansion plans in Odisha, Bhattacharya said, “We already have 106 branches in the state. We also have 112 ATMs in Odisha. We have a presence all over the state. We will open new branches in villages where there are no banks now. Discussions are going on between the government and the RBI for opening branches in unbanked areas. We are also thinking of opening three branches in unbanked areas across the state.”
On whether demonetisation and GST had hit the banking sector, he said: “It is a fact that things have slowed down a bit after demonetisation and GST. GST is still in its infancy and hasn’t caused anything alarming to the banking industry. There has been some impact…there are reports that small businessmen and traders have been affected by GST. I think the entire system will stabilise soon.”
He also felt it is too early to comment on the Insolvency and Bankruptcy code. “It appears to be good but let’s see what happens. We cannot comment on it now as we are suffering losses. Let’s see how many accounts are resolved under this, and what the impact is. Only then it is possible to form a general opinion.”
Speaking about investment options for depositors and their worries about falling interest rates he said, “The interest rate is dependent on supply and demand. After demonetisation huge amounts of money came into the banking system. In fact, our CASA deposits (Current Account and Savings Account) have recorded astronomical growth post demonetisation. So if banks are flush with money naturally it will impact the rate of interest. The economic scenario suggests that the rate of interest will go down again.
Falling interest rates have forced many to invest in mutual funds. According to reports the mutual fund industry’s AUM (assets under management) have crossed the Rs 20 trillion mark in 2017 and has more than doubled since 2014. After demonetisation the industry’s AUM has increased 32 per cent and has been growing rapidly.
Analysing the new investment trends he said, “Some people will shift to mutual funds but the general public is not educated enough to evaluate mutual funds scientifically and select them. So loses cannot be ruled out. MFs are actually a very risky proposition.”
