The Rajgurunagar Sahakari Bank, based in Pune, Maharashtra, has advocated for the Reserve Bank of India (RBI) to extend the limit on Commercial Real Estate (CRE) lending from the current 10 percent to 20 percent, citing significant growth in business activity within its area.
In a conversation with the Indian Cooperative correspondent at the office of the Pune Urban Cooperative Banks Association, the bank’s Chairman, Dinesh Oswal, explained, “Our head office is in Rajgurunagar, and we also have a branch in Chakan MIDC, which is a hub for automobile companies.”
“We are witnessing substantial business growth in this area. However, due to the current 10 percent cap, we are unable to accommodate the increasing number of borrowers, which is hindering the bank’s potential growth”, he added.
He further added, “This surge in demand for CRE financing calls for a higher lending limit. Raising the cap would enable the bank to better serve the growing needs of businesses and foster the continued development of commercial real estate in the region.”
Highlighting the bank’s growth during his tenure, Oswal said, “When I took charge as the bank’s Chairman in June 2023, the business mix of the bank was around Rs 2200 crore. But as of 31st December 2024, the business crossed Rs 2800 crore, and we are hoping to achieve a business mix of over Rs 3000 crore by the end of the current financial year.”
Additionally, under his leadership, the bank’s net NPA has been brought down to ‘Zero,’ and efforts are being made to lower the gross NPA levels. “Though the bank has been under SAF since 2018, we are now meeting all the required parameters, and we are optimistic that the SAF will be lifted in the next couple of months, as RBI is currently reviewing it,” he added.
Oswal further claimed that Rajgurunagar Cooperative Bank is the first bank in Pune and the third bank in India among the UCBs to provide loans under MSMEs under the Prime Minister Employment Generation Programme (PMEGP). “Last year, we received approval from the Ministry of MSMEs to provide subsidized loans to industrial businesses under the PM Employment Generation Program. So far, around 350 borrowers have been lent amounts under the scheme, totaling Rs 7.5 crore, and the borrowers are also receiving subsidies under the scheme. The bank is also looking forward to enrolling in the CMEGP scheme soon.”
Currently, the bank has a network of 17 branches, and efforts are being made to open more branches. The process of acquiring self-owned buildings for a few of the branches is also underway.
