Kerala Bank seeks RBI nod to collect NRI deposits

Aims to use these NRI deposits to develop the basic infrastructure of the State..

Kerala Bank has sought the permission of the Reserve Bank of India to collect deposits from NRI’s, eyeing the ₹1,50,000,000 crore NRI deposits credited to various commercial and PSU and private sector banks in the State.

V N Vasavan, the State Cooperation Minister, pointed out that a major share of this NRI deposit amount is being utilised for disbursing loans to big corporates outside the State and in speculative businesses in stock markets. Kerala Bank is aiming to utilise these NRI deposits for developing the basic infrastructure of the State.

The bank will provide an opportunity for non-resident Keralites to be part of the development of the State and to intervene in its economy, he added.

IT integration programme

The Minister was speaking to reporters after launching the IT integration programme, thereby transforming the bank into a modern bank providing all digital banking services.

Finacle software from Infosys will be used for core banking initiatives. With this, Kerala Bank will become the first cooperative bank in the country to use the most modern version of Finacle. Wipro has taken charge of the software unification and IT integration is expected to be completed by April 1, 2022.

Model cooperative bank

Kerala Bank, which is formed as a model to the entire country in the cooperative banking sector through the merger of 13 DCB’s, has grown to the position of the second largest bank in the State with total business of ₹1,06,396 crore and 769 branches. The bank has been able to disburse ₹842.54 crore so far for employment schemes, as part of the 100 days action programme of the State Government, said P S Rajan, the CEO of the bank.

The bank has been able to post a growth of 9.27 per cent in deposits for the first full financial year (2020–21) after its formation. The deposits rose from ₹61,071 crore to ₹66,731 crore. The net profit for the year 2020–21 was ₹61.99 crore.

The bank has been able to bring down its NPA from above 25 per cent at the time of the merger to 14.40 per cent. As of last fiscal, NPA stood at ₹5,738 crore. The accumulated loss during the merger was ₹1,151 crore and the bank could bring it down to ₹714 crore.

It has also made significant progress in providing a refinance scheme through NABARD. The refinance facility, which was ₹4,315 crore in 2019–20 shot up to ₹6,058 crore in 2020–21. The increase was 40.39 per cent.

Capital to risk (weighted) assets ratio (CRAR), which was the major indicator of financial stability, was 6.26 per cent at the time of merger. This has increased to 10.18 per cent now. The RBI insists only on a CRAR of 9 per cent. The bank was able to scale up CRAR riding on the ₹400 crore share investments by Kerala Government.