Net­work, busi­ness im­prove for banks in Ma­ha­rash­tra

Branches as well as businesses of banks op­er­at­ing in Ma­ha­rash­tra have in­creased in 2017-18 as the state is set to be­come the first tril­lion ru­pee econ­omy in the coun­try:

Banking Frontiers - - Highlights - Me­hul@bank­ingfron­tiers.com

Branches as well as businesses of banks op­er­at­ing in Ma­ha­rash­tra have in­creased in 2017-18 as the state is set to be­come the first tril­lion-ru­pee econ­omy in the coun­try

As there has been a par­a­digm shift in Ma­ha­rash­tra’s fi­nan­cial at­trac­tive­ness in re­cent times, banks op­er­at­ing in the state are spruc­ing their net­works to garner more busi­ness from the tril­lions of ru­pees of com­mit­ted in­vest­ments.

BUSI­NESS: PSBS FAR AHEAD

The to­tal busi­ness done by all the bank branches put to­gether in the state is `37.29 tril­lion as of 31 De­cem­ber 2017, out of which PSU banks’ busi­ness stood at `24.81 tril­lion and pri­vate banks at `11.17 tril­lion, ac­cord­ing to the lat­est data from Ma­ha­rash­tra SLBC, up­dated till Q3 of the cur­rent FY. While banks in Ma­ha­rash­tra had col­lec­tive busi­ness of `35.78 tril­lion at the end of FY2016-17, banks’ com­bined loans stood at `17.79 tril­lion and de­posits at `17.98 tril­lion.

Banks in the state are likely to see siz­able op­por­tu­ni­ties for credit growth in all sec­tors in the months to come as 4106 MoUs worth over `12.10 tril­lion have been signed dur­ing the ‘Mag­netic Ma­ha­rash­tra: Con­ver­gence 2018’, held in Mum­bai re­cently. Of these, 3516 MoUs are in in­dus­tries, 113 in skill de­vel­op­ment, 12 in higher ed­u­ca­tion and 8 in IT, with ex­pected gen­er­a­tion of 36 lakh jobs.

Ma­ha­rash­tra chief min­is­ter Deven­dra Fad­navis had said: “The in­dus­try sec­tors - man­u­fac­tur­ing, fu­tur­is­tic sec­tors like hy­per­loop, elec­tric ve­hi­cles, lo­gis­tics, tex­tiles, gems and jew­elry - ac­count for `5.48 tril­lon of `12 tril­lion pro­jected in­vest­ment, fol­lowed by hous­ing at `3.85 tril­lion and en­ergy at `1.60 tril­lion. The state has also re­ceived in­vest­ment in­ten­tions of `57 bil­lion in the in­for­ma­tion tech­nol­ogy sec­tor and `24.4 bil­lion in higher ed­u­ca­tion. It will also get `10 bil­lion Ma­ha­rash­tra De­fence & Aerospace Fund to pro­mote in­vest­ment in de­fence and aerospace be­cause many play­ers have ex­pressed in­ter­ests in in­vest­ment in this sec­tor.”

RE­GIONAL NET­WORK & GROWTH

There are to­tal of 15,475 bank branches in Ma­ha­rash­tra as of De­cem­ber 2017. Of these, 8908 are PSU bank branches, 2092 pri­vate bank branches, 3731 branches of co­op­er­a­tive banks, 735 branches of 2 RRBs and 9 branches of Sub­hadra Lo­cal Area Bank. The state has a fairly dis­trib­uted bank branch net­work across var­i­ous re­gions, towns and vil­lages. It is ex­pected that in­dus­tri­ally back­ward ar­eas of the state will wit­ness many busi­ness ac­tiv­i­ties and as such there could be more bank­ing ac­tiv­i­ties, as in­di­cated by the num­ber of MoUs at the Mag­netic Ma­ha­rash­tra con­fer­ence.

Fad­navis said the state is get­ting in­vest­ments across sec­tors in in­dus­tri­ally back­ward tier 3 places like Nan­dur­bar, Nanded and Parb­hani in Marath­wada, as well as Wardha in Vi­darbha, and small towns such as Pal­ghar, Bhi­wandi, Au­rangabad and Nag­pur among oth­ers. While Marath­wada stands to gain the most, in­vest­ments will give a ma­jor facelift to the back­ward re­gions of Vi­darbha, parts of north and western Ma­ha­rash­tra and Konkan, he said adding, what has re­ally changed is the abil­ity to en­gage in­vestors to look beyond the golden tri­an­gle of Mum­bai, Pune and Nashik.

BUSI­NESS IN SE­LECT DISTRICTS

Nan­dur­bar has 77 bank brances - 37 ru­ral, 28 semi-ur­ban and 12 ur­ban. Banks here could lend `17.62 bil­lion out of the de­posits of `34, 83 bil­lion as of Q3, 2017-18. It has a

low CD ra­tio of 50.58, which should im­prove with new busi­ness. Fad­navis says the tribal district at­tracted in­vest­ments worth `700 crore from Genus Pa­per and Boards. Lloyd Me­tal and En­ergy has agreed to in­vest `700 crore in the Maoist violence-af­fected district of Gad­chi­roli, he added.

Nanded district has 295 branches of all banks present, out of which 132 are in ru­ral, 74 in semi-ur­ban, 87 in ur­ban and 2 in metro ar­eas. They have a to­tal busi­ness of `221.21 bil­lion as of Q3, 2017-18, with a CD ra­tio of 82.53. The banks’ credit stood at `100.02 bil­lion.

With new projects com­ing in, these banks in the district can look for­ward to new busi­ness op­por­tu­ni­ties. Fad­navis said n Nanded, In­dia Agro Anaj has in­vested `200 crore. In Hin­goli, `125 crore would be in­vested by Shiur Agro.

It is ex­pected that the In­dian Rail­ways will es­tab­lish a coach fac­tory at Latur, which may change the land­scape of the en­tire Marath­wada re­gion. Ac­cord­ing to Fad­navis, the metro coaches built here will be ex­ported glob­ally. The project, with an in­vest­ment of `600 crore, will help Beed, Latur and Os­man­abad districts too. It will also cre­ate whole gamut of an­cil­lary in­dus­tries as well.

Wardha district in Vi­darbha has all the scope to in­crease its low CD ra­tio of 59.25. Fad­navis had dis­closed that MoU for set­ting up a `2.17 bil­lion com­mon fa­cil­i­ta­tion cen­tre in Vi­darbha for aerospace and de­fence sec­tor has been signed with Tata Tech­nolo­gies.

With new projects com­ing up, banks present in Pal­ghar can look for­ward to fresh busi­ness op­por­tu­ni­ties. Chhatrapati Shivaji In­dus­trial City at Pal­ghar re­ceived `120 bil­lion in­vest­ment and can cre­ate em­ploy­ment for 65,000, ac­cord­ing to Fad­navis. Sim­i­larly Thrust Air­craft Clus­ter- MIDC MoU worth `350 bil­lion with 157 acres of land in Pal­ghar will cre­ate 10,000 jobs.

South Korean com­pany Hyosung, the largest global span­dex pro­ducer, has agreed to de­velop a tex­tile town­ship spread in 100 acres land near Shen­dra in Au­rangabad in col­lab­o­ra­tion with Ma­ha­rash­tra In­dus­trial De­vel­op­ment Cor­po­ra­tion. Bank branches of banks op­er­at­ing here can gain from this project. This would be the first FDI project in the Delhi-Mum­bai In­dus­trial Cor­ri­dor with an in­vest­ment of about `30 bil­lion.

Banks have a good chance of in­creas­ing lend­ing in Nag­pur. Anand Mahin­dra, chair­man of Mahin­dra Group, has an­nounced dur­ing the sum­mit that Tech Mahin­dra will in­vest `125 crore to cre­ate an all-green Tech Hub in Nag­pur. The hub is ex­pected to cre­ate at least 2500 jobs. Chief min­is­ter Fad­navis had said the state govern­ment’s en­ergy depart­ment and Giri­raj Re­new­ables had signed an MoU for a so­lar panel project worth `2100 crore in­vest­ment. The Ma­ha­rash­tra State Power Gen­er­a­tion Com­pany too has signed an MoU for an in­vest­ment of `5200 crore in 800 MW ther­mal power project in Um­red tehsil of Nag­pur district. De­viCity Lo­gis­tic Park will come up in Nag­pur with an in­vest­ment of `424 crore.

CREDIT, RE­COV­ERY TO BE UP

De­lib­er­a­tions at the SLBC in­di­cate that bank­ing busi­ness in the state has been get­ting a fresh im­pe­tus and the sce­nario will fur­ther im­prove dur­ing the cur­rent FY. A.C. Rout, ED at Bank of Ma­ha­rash­tra agreed dur­ing the dis­cus­sions at 137th SLBC meet­ing held in De­cem­ber 2017 that the per­for­mance of the state dur­ing the first half year of 2017-18 was low How­ever, he is hope­ful that de­spite ini­tial hic­cups in dis­burse­ments, once the im­ple­men­ta­tion was over, rou­tine cy­cle of fresh dis­burse­ments, re­cov­ery, re-sched­ul­ing, etc, would pick up in the com­ing months.

Deven­dra Fad­navis

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