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Allahabad Bank seeks World Bank loan to modernise

In its efforts to push forward the modernisation-cum-computerisation programme with greater speed, the Allahabad Bank has sought a World Bank loan of Rs 800 million under the 'Modernisation and Institutional Development Loan' scheme during the next two years.

Bank Chairman-cum-Managing Director Harbhajan Singh said under the programme, 260 of the nationwide 1,068 branches of Allahabad Bank would be computerised by the year 2000. Of these 60 branches would be fully computerised by the end of next year, while another 200 odd branches would be brought under partial computerisation programme by the year 2000.

He said since the launching of the modernisation programme a few years ago, another 123 branches had already been computerised, either fully or partially at an additional cost of Rs 300 million.

Further elaborating the provisions of the World Bank loan under the MIDL programme, Singh said like some other nationalised banks -- Dena Bank, Bank of India, Indian Overseas Bank, and the Syndicate Bank -- who availed of similar loans, Allahabad Bank would spend the entire Rs 800 million in phases during the next two years from its own resources and internal fundings. Only after completion of the whole programme, the entire amount would be reimbursed by the World Bank by converting it to a long term loan to be paid back in several instalments.

Stating that the bank had also undertaken a massive infrastructural development programme and set up a high-powered committee headed by the general manager to oversee the progress, Singh said the committee would not only ensure an allround development of the bank, but also see that its customer services was improved to a great extent shortly.

"We have also decided to broadbase our services to a great extent by giving more stress on the international banking division," the chairman said, and made it clear that they also proposed to increase the number of Allahabad Bank's international branches from seven at present to at least 10 by the year end. "At present, we run international banking not only from all the four metropolitan cities, but also through smaller cities like Varanasi and Ludhiana," he said.

Commenting on the overall financial performance of the Calcutta-headquartered bank, which had registered a growth of more than 100 per cent during the past two years, increasing its net profit margin from only Rs 56 million during 1995-96 to Rs 643.1 million during 1996-97, the chairman declared, "Keeping in view the performance of the bank during the first quarter of the current financial year (1997-98), we are very much hopeful of maintaining similar growth rate during this year and the coming years too."

Singh said that since the bank was emphasising mainly on modernisation and infrastructural development programmes, "very few new branches would be opened soon."

The chairman said about 200 out of 1068 branches were incurring losses, located in the rural, semi-urban and urban areas. "However, we are trying to chalk out a detailed scheme to change their financial perspective," he added, and pointed out that unlike most other nationalised banks, 70 per cent of Allahabad Bank's branches were situated in either rural or semi-urban areas.

Singh disclosed that though the gross non-performing assets stood as high as 23 per cent, the bank's net NPA margin had come down to only 14.8 per cent so far, thanks to some well thought-out measures. "During the coming years we propose to bring it down further through a special drive," Singh declared.

Allahabad Bank has been associated with the City of Joy since its inception about 102 years ago. Singh stated: "We feel proud to be closely associated with the Rs 36 billion Haldia Petrochemical megaproject besides a number of other downstream projects initiated by the West Bengal government with involvement of several hundreds millions of rupees."

UNI