Dhanlaxmi Bank Set To Focus On NPA Reduction, Says CEO

In the third quarter, operating profit increased by 38.96 per cent and net profit by 177.69 per cent. Both net interest income and non-interest income also increased by 8.92 per cent and 24.87 per cent, respectively. We could improve the net interest income through proper liability management. Our efforts to recover from written-off accounts also led to a pick-up in total income. Further reduction in provision requirement for NPA accounts due to effective recovery/monitoring measures, and reduced provision requirement for investment portfolio, supported the increase in net profit.

Why has gross NPA increased?

Gross NPA rose to 8.11 per cent of total advances from 6.96 per cent. It increased slightly due to stress in a few accounts in last three quarters. However, the net NPA is at the same level. To reduce gross NPA we strengthened the monitoring mechanism, which helped to control fresh slippages. However, there is no particular sector responsible for the increase in gross NPA.

Net NPA declined to 2.93 per cent from 4.08 per cent a year ago. This was due to the recovery. Moreover, we have strengthened and streamlined the entire recovery and monitoring process and, reviewed regularly, at various levels, to improve the effectiveness.

The bank intends to improve the business by concentrating on retail growth, both in assets and liabilities. NPA reduction is another focus area, besides improving non-interest income. We have formed marketing teams in all regions to source credit business. Our main focus will be on gold loans, retail loans, business loans, and MSMEs. We have very strong business in the micro finance sector, and have come out with specific products to facilitate women customers. We also support women through self-help groups. We introduced a new loan product, based on GST returns, to offer speedy solutions for the working capital requirements of MSME customers by way of overdraft.