MUMBAI, Nov 11: The Bank of India (BoI) is planning to have a special audit of its advances to monitor the end-use of loans given to the corporate sector.

``Due to liberalisation and the recent changes in the credit delivery mechanism, it is very difficult to monitor the use of funds given as advances to the corporate sector. Control and monitoring of funds is very difficult,'' said M G Bhide, Chairman and Managing Director, BoI.

In order to face various types of business risks emerging from liberalisation, the bank is also setting up a separate risk management department. As part of the integration of various markets, BoI is also setting up a combined treasury for money and foreign exchange operations.

The bank has recorded a net profit of Rs 222 crore (which includes other income of Rs 30 crore from the sale of its properties in Singapore) for the six-month period ended September 1997. While the operating income during the period stood at Rs 366 crore, its reserves and surplus had reached Rs 1679 crore. With a capital adequacy ratio of 11.53 per cent, the total income during the period increased to Rs 2,166 crore at September end, 1997.

BoI's global deposits touched Rs 33,422 crore on September 30, 1997 and domestic deposits increased by Rs 1,962 crore. The bank's NPA level has gone up from 6.52 per cent at March end 1997 to about 7.97 per cent at September end, 1997. The bank made a total provision of Rs 144 crore during the year for taxation, NPA and other expenses.

The half-yearly results have been reviewed by five central statutory auditors on the basis of unaudited consolidated returns. It is also planning to augment its long-term resources through Tier II capital by Rs 500 crore shortly through private placement towards its asset expansion. ``The bank is actively entering the bullion market by introducing various financial products linked to gold,'' Bhide said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.