Chennai, Oct 4 (IANS) City-based Repco Bank, a cooperative society floated 40 years ago to assist repatriates from Sri Lanka and Myanmar, is now looking at transforming itself into a commercial bank to tap the benefits of the sector, its officials say.
“Our board has sought the permission of the Indian government to become a proper bank governed by RBI (Reserve Bank of India),” bank managing director M. Balasubramanian told IANS.

Repco, or Repatriates Cooperative Finance and Development Bank, was floated in 1949 by the home ministry and four southern states to help repatriates.

It was registered as a cooperative society under the Multi-State Cooperative Societies Act with a special permission from the government to use the word “bank” in its name.

However, with the influx of repatriates from Sri Lanka and Myanmar coming to a halt, there is a need to reorient the bank’s business to stay relevant, its officials said.

According to Balasubramanian, there are two options before Repco. “We can either become an urban cooperative bank or a scheduled bank.”

Although it has been registered as a cooperative society, Repco is following the central bank’s prudential norms, Balasubramanian said.

“A recent infusion of additional capital by the promoters was to meet the central banks capital adequacy ratio (CAR),” he added.

The central government has infused Rs.75 crore into the bank, while Tamil Nadu and Andhra Pradesh have invested Rs.2.8 crore and Rs.1.35 crore, respectively.

Karnataka and Kerala have agreed to contribute Rs.10 lakh each.

With this additional equity infusion, the bank’s shareholding pattern has also changed.

The central government will now control 65 percent stake, while the four state governments will together own 30 percent. The balance will be held by repatriates, Balasubramanian said.

Asked about the bank’s expansion plans, he said Repco is targeting to double its business to Rs.6,000 crore by 2012 and is increasing its branch network from 30 to 85.

The bank will also leverage its subsidiaries operating in diverse areas such as finance, infrastructure and IT.

“A separate unit makes fund raising easier. For instance Repco Home Finance can get refinancing from National Housing Bank (NHB) which is not possible for us,” Balasubramanian said.

The bank’s total deposits as of date stood at around Rs.3,000 crore, while its advances were Rs.1,700 crore.

“Our gross non-performing asset (NPA) is around 1.7 percent and the net NPA is nil,” he said.