Corpn Bank launches gold deposit scheme

Corpn Bank launches gold deposit scheme
ENS ECONOMIC BUREAU

MUMBAI, JAN 22: Public sector Corporation Bank which launched its CorpGold Deposit Scheme on Saturday collected 100 kg of gold on the first day and targetted to collect about 25 tonnes in the first year of operations. The bank has also inaugurated its wholly-owned subsidiary "CorpBank Securities Ltd" and announced its decision to set up the insurance venture this year.

The new subsidiary with an authorised capital of Rs 100 crore has been set up for taking up primary dealership to provide both depth and breadth in the government securities (Gilt) market. Balasaheb Vikhe Patel, Union minister of state for finance, inaugurated the subsidiary and launched the gold deposit scheme.

The bank expects to launch its insurance joint venture by October this year with one foreign partner and a stake of more than 30 per cent. "I have written to the Reserve Bank of India (RBI) seeking relaxation in its guidelines restricting domestic banks to a 30 per cent stake in the insurance venture," Corporation Bank chairman and managing director R S Hugar told newsmen on the sidelines of the launch of its gold deposit scheme.

``The bank is one of the few banks to satisfy the eligibility criteria put forth by the regulator. The ground work for the insurance venture has begun and we should be getting the license by October,'' he added.Speaking on the occasion, Hugar said that the setting up of the gilt subsidiary was considered by the bank to give a focussed thrust to the treasury operations, which is one of the profitable and core-competence areas of the bank. The new subsidiary headed by R K Nair, DGM of the bank, will be taking up underwriting and market making in government securities and also improvement in secondary market trading system.

Hugar said that the introduction of the gold scheme is keeping in view the priorities of the government. ``The scheme would bring about a change in the mindset of the public in their traditional view on gold from an idle-asset to an interest bearing-asset,'' he said. The CorpGold Deposit Scheme would be initially operationalised in 15 select branches spread accoss the country.

Net profit up 12.6 pc
MUMBAI: Corporation Bank has recorded a net profit of Rs 177.42 crore for the nine-month period ended December 1999 compared to Rs 157.59 crore in same period last year, an increase of 12.6 per cent. The total income during the period stood at Rs 1368.12 crore (Rs 1128.29 crore), indicating a fairly good growth of 21.3 per cent.

The bank has posted a net profit of Rs 65.68 crore in the quarter ended December 1999 as against Rs 50.86 crore net profit in the same quarter previous year. The bank could reduce its net non-performing assets to 1.87 per cent which is one of the lowest in the banking industry. The bank has also made a provision of Rs 12 crore for standard assets in tune with Reserve Bank of India guidelines. The aggregate deposits have increased by Rs 2,322.11 crore (19.17 per cent) to reach Rs 14,436 crore compared to same period last year.