Hyderabad: Mangalore-headquartered Corporation Bank expects Reserve Bank to cut CRR (cash reserve ratio) by 100 basis points in its next week's mid-quarter policy review to facilitate liquidity flow into the system.
"We would welcome the rate (CRR) cut at least by 100 basis points. That would send a right message also. We feel the worst (on financial front) is over. If they cut the CRR by one percent, the system will get Rs 65,000 crore," said Corporation Bank Chairman and Managing Director Ajai Kumar.
The public sector lender aims to grow its business to Rs 3,00,000 crore in the current financial year, he said at a press conference here.
CRR is the portion of deposits that banks are required to keep with RBI. In the last six months, RBI has reduced CRR by 125 basis points and it currently stood at 4.75 percent.
Largest public sector lender State Bank of India has said it also expects one percent cut in CRR.
Last year, the cost of funds had gone up because of high interest rates. Accessibility to credit was becoming costlier due to which many large projects have been put on hold, Kumar added.
To a query, he said the Rs 3 lakh crore business target was possible as the bank has entered into niche areas such as gold loans and commercial vehicle financing.
"The bank's credit off take was about 17 percent last year. It has been slow in the first two months in the quarter. However, we expect 20 percent growth in the current fiscal."
In the last fiscal, Corporation Bank's total business stood at Rs 2.37 lakh crore, registering a growth of 16 percent over the previous year.
According to Kumar, they are planning to open at least 300 new branches in the current fiscal year.
Replying to a query, Kumar said the bank's exposure to crisis-ridden aviation industry is about Rs 1,500 crore with Air India leading at Rs 1,300 crore.
PTI
First Published: Wednesday, June 13, 2012, 22:27