Bank chairman KP Padmakumar told mediapersons that while the bank had a total deposit base of Rs 6,741 crore, it advances stood at Rs 4,340 crore. As far as interest rate expenditure was concerned, the bank has been able to reduce it by Rs 35.83 crore to Rs 331.33 crore. The chairman attributed this to the general decline in interest rates and liability management.

Recovery of bad debts was to be a thrust area for the bank, Mr Padmakumar said. In the first half of this fiscal, the bank has been able to recover Rs 33.47 crore. The target fixed for this fiscal was Rs 136 crore compared to Rs 130 crore in the previous year. Asked whether the bank had set too ambitious a target given the present economic scenario, Mr Padmakumar said that Federal Bank was confident of achieving the target.

The second half of the fiscal should see much activity, he added. In most cases, the bank will be taking a compromise route. He also stated that activities on this count had been started. The bank's non-performing assets (NPAs) are distributed among non-banking financial companies (NBFCs), real estate, steel and textile sectors. Mr Padmakumar admitted that there was not much activity being seen in these areas. A separate asset recovery branch would be opened on November 6 in Chennai, he said.

Mr Padamkumar said the bank had reduced the cost of deposits by 121 basis points to 9.12 per cent. In the previous period, it stood at 10.33 per cent. The bank has targeted non-resident Indians (NRIs) and will be soon developing its NRI services, besides maintaining a thrust on retail banking. The bank has a total NRI deposits base of Rs 2,942 crore which comes to 41 per cent of the bank's total deposits.

Regarding information technology developments, the chairman said that the bank was going ahead with its bank network connection which will be completed by 2003. The total investment for this has been fixed at Rs 50 crore.

The bank has implemented Internet banking in 120 branches and the network would be extended to 200 branches soon. Besides having automated teller machines (ATM) counters in a few more banks, it will be opening two more branches. The ATMs are planned in Kochi city and at Kochi international airport.