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To migrate to Finacle core banking solution this year, says CMD

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Kerala Financial Corporation (KFC), one of the leading state financial corporations, has doubled its net profit for the year ending March 31, 2021. According to audited financials, it posted a net profit of Rs 13.09 crore, compared to the previous year’s ₹6.56 crore. Operating profit, too, has increased to ₹92 crore (₹29 crore).

The Corporation improved its performance despite the severe stress brought on the economy by the Covid-19 pandemic, said Sanjay Kaul, Chairman and Managing Director. NPAs are also under control, with gross NPAs dropping to 3.27 per cent (3.58 per cent) and net NPAs to 1.28 per cent (1.48 per cent).

Migrating to Finacle

“The Corporation plans to double the size of its loan portfolio to ₹10,000 crore, for which it will focus on technology-based growth. This year it will migrate to the Finacle Core Banking Solution. The entire lending journey is sought to be digitalised through a Loan Origination System. A virtual working capital scheme will be introduced in association with the banks,” said Kaul.

Its loan portfolio is currently at ₹4,750 crore, while its networth has increased by 2.46 per cent to ₹695 crore during the financial year under reference, and its Capital to Risk-Weighted Assets Ratio (CRAR) stands at 22.41 per cent. The Corporation has concentrated its lending on the core MSME sector and start-ups and disbursed ₹1,877 crore, the highest in its history.

Interest rates reduced

The Corporation has reduced the rate of interest across all sectors in view of the Covid-19 stress to MSMEs. An additional 20 per cent in loans went to existing customers in the hospitality, travel, tourism, leisure and sporting sectors to meet liquidity issues. It has assisted 26 start-ups with ₹27.60 crore under ‘Start-up Kerala,’ a comprehensive scheme offering loans without any collateral. Recoveries improved without it resorting to any coercive measures. A Covid Special Loan Settlement Adalat alone realised ₹83.73 crore. Loans of up to ₹1 crore were given to 1,969 MSMEs at an interest rate of 5 per cent under the Chief Minister’s Entrepreneurship Development Programme.

Published on June 10, 2022