Oriental Bank sees higher credit growth next fiscal

To exercise caution while extending loans, says MD

With the Reserve Bank of India (RBI) deciding to lift restrictions under the prompt corrective action (PCA) on Oriental Bank of Commerce (OBC), the lender now sees higher credit growth in the next financial year while being cautious in extending loans.

“We have identified our bank as a national bank for retail and MSMEs. So, our credit growth was 27% for retail advances. We are going to follow that strategy only. During the current year, our credit is expected to grow around 8-10%. Next year, we are likely to grow by 12-14%,” M.K. Jain, MD and CEO, of OBC told The Hindu.

“We will not be jumping into credit growth, we will approach it cautiously,” he added.

He said the removal of the restrictions will also help the lender recruit experts in areas like risk management and treasury.

“Also, if I have to close some branches — which was a strategy to revive the bank — and open new branches, that was also not permissible. We were also finding it difficult to lend to government guaranteed accounts because they are normally unsecured loans,” he said, while adding that the bank will wait for the RBI communication to see exactly what restrictions had been removed.

He also said the bank’s employee stock purchase scheme, that was launched on Thursday, was oversubscribed in six hours. The bank would garner ₹250 crore from the share sale.