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Oriental Bank of Commerce to go easy on large advances: Report

By Religare
|

According to media reports, state-run lender the Oriental Bank of Commerce is likely to reduce its focus on bulk deposits and large corporate advances in a bid to protect its asset quality amid a rise in corporate bad loans in the banking sector of Asia's third biggest economy.

Like other state-run banks, Oriental Bank of Commerce is also grappling with rising bad loans as high interest rates and weak business and investment spending amid an economic slowdown toughen the outlook for the banking sector.

 

In the first nine months of FY 2013-14, the lender's slippages stood at Rs 2,800 crore while recovery was Rs 1,300 crore amid stress in large corporate loan assets.

Sectors such as steel, road and power have seen a rise in stress loans as a slowdown in corporate spending and higher borrowing costs delays loan recovery.

The bank, which said that reduction of non-performing loans will take some time, has a Gross NPA of 3.87 per cent.

"We are not chasing bulk deposits as well as going for large corporate advances unless there is a very good asset for the time being," OBC Chairman and Managing Director S L Bansal told the PTI.

Read more about: oriental bank of commerce
Story first published: Monday, February 24, 2014, 18:01 [IST]
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