Hyderabad, October 28: Andhra Bank today said it is not worried over its exposure to micro-finance institutes (MFIs) in Andhra Pradesh, where the MFIs are facing rough weather.
The bank has an exposure of Rs 300 crore towards micro-finance sector all over the country, Andhra Bank Chairman and Managing Director R Ramachandran said.
“Advances to micro-finance sector are like any other sector. We consider MFIs as any of our other corporate borrower. We don’t see any potential threat as of now,” he said.
Andhra Bank is also part of five-member core committee of the state level bankers constituted after the alleged suicides due to the coercive methods of micro-finance companies.
Ramachandran said banks have not been indicated of the debt swap that the State government had mooted earlier to relieve MFI borrowers with debt burden.
He said the committee with its other members – State Bank of India, State Bank of Hyderabad, Indian Bank and Syndicate Bank will to meet in a week’s time to examine various issues related to self-help groups (SHGs) formed under the government scheme.
“We will examine issue like the total exposure of SHGs towards micro-finance companies, if any multiple lending is involved and what type of safeguards are there for them (SHGs),” he said.
Meanwhile, the bank posted a net profit at Rs 303 crore for the quarter ended September 30, up 10.58 per cent over the same period last year.
The operating Profits of the bank increased to Rs 565 crore for the quarter from Rs 453 crore the same period previous year.
Ramachandran said the bank may face some pressure in maintaining its net interest margin, which moved up to 3.91 per cent during the quarter from 3.14 per cent in the same period last year.
–PTI