The bank’s RAM portfolio is expected to grow from 54% to 65% in two years
The Bank of India (BoI) plans to roll out a mobile lending platform to grow its RAM portfolio (Retail, Agriculture and Micro, Small and Medium Enterprises) from around 54% of total domestic lending to 65% In two years .
The bank is developing a technology stack to boost its digital banking presence, according to PR Rajagopal, chief executive.
Referring to the fact that many banks hold more than 60% of total domestic advances in the RAM segment, he observed that digital lending will help rebalance the composition of the BoI’s portfolio in favor of RAM advances.
“Our RAM portfolio is hovering around 54%. So we need a very strong digital push to grow this portfolio.
“We will launch a super app by the second quarter of FY23. Vendors have been onboarded to build the app,” Rajagopal said.
The app will ensure that the public sector bank can digitize loan sourcing, impose principle penalties on customers, and sell non-bank financial services products such as insurance, mutual funds, etc.
“We disburse RAM loans totaling almost ₹1 crore lakh on an annual basis without any digital backup. If we put the technology stack in place, we can grow our RAM portfolio by ₹2 crore lakh over two years,” the BoI ED said.
The public sector bank’s RAM portfolio increased from 51.60% of total domestic advances at the end of March 2021 to 54.23% at the end of December 2021. Gross domestic advances increased from ₹3,62,361 crore to the end of March. 2021 at ₹3,82,365 crore as of end December 2021.
The Bank’s RAM portfolio increased by 12.47% YoY to reach ₹2,07,381 crore in the third quarter ended December 2021. Corporate and other advances decreased by 3.95% YoY annual to reach ₹1,25,864 crore. Government and government guaranteed advances increased by 3.25% YoY to ₹49,120 crore.
Commenting on the moderate growth in the corporate portfolio, Rajagopal said: “While corporate deleveraging has occurred, private investment needs to pick up. So the recovery of credit in this segment will take time.
March 06, 2022