Rural-savvy Allahabad Bank plans to don an urbane robe

Venkatachari Jagannathan
17 October 2002

Chennai: With 50.1 per cent of its 2,052 branches located in rural areas, Allahabad Bank has decided to expand its branch network in urban centres — and most of them in the southern region. Currently the bank has a major presence in India’s northern and eastern regions.

The bank, however, is yet to freeze the number of new branches to be opened, says Allahabad Bank chairman and managing director B Samal. The bank’s remaining branch network is located in semi-urban (16.8 per cent), urban (19.2 per cent) and metropolitan (13.9 per cent) areas.

As the branch network is skewed heavily towards rural areas, the bank is now realigning some of them to cater to the semi-urban centres, too. Samal says the bank’s retail thrust through special branches called retail-banking boutiques is providing good business. At the end of the last fiscal, the total credit extended by these specialised outlets stood at Rs 890 crore.

During the first half of the current fiscal, Allahabad Bank has generated an additional business of Rs 800 crore, out of which Rs 500 crore is from retail advances. “The retail advances are logging an impressive 15-per cent growth,” he says. The bank, which has added 2 lakh retail customers during the last two years, has signed a bancassurance deal with ICICI Prudential Life Insurance to increase its non-interest income.

Apart from retail boutiques, the bank has 32 specialised branches and corporate boutiques to cater to medium-sized corporates. At a time when new private banks are reaping the benefits of their investments in information technology (IT), Allahabad Bank, like many other nationalised banks, still lags on that front. Only 342 branches have been fully computerised till date.

Samal says some of the IT solutions were developed in-house and some sourced from outside. “The bank has hired consultants to advice on the kind of investments to be made on IT. We are utilising the Rs 60 crore borrowed from the World Bank for bank computerisation. We plan to install 100 automatic teller machines (ATM) to our existing 41 ATMs in 23 cities.”