Thiruvananthapuram, June 1 : Kerala's State Bank of Travancore (SBT) is set to shore up its Middle East operations after witnessing a minor fall in non-resident external (NRE) deposits for the first time in several years.

NRE deposits, according to SBT managing director Om Prakash Bhatt, fell from Rs. 73.8 billion ($1.6 billion) in 2003-04 to Rs.72.07 billion in 2004-05.

This has happened at a time when the bank's total deposits grew by an impressive 22.37 percent to touch Rs. 240 billion, up from Rs.197 billion in 2003-04.

"The reason for the fall is because of a Reserve Bank of India directive on interest rates and not because a saturation point has been reached," Bhatt told reporters Wednesday.

"Since the rates have gone up, the flow of NRE deposits is good and we would certainly do our best to woo our clients with better and faster service," Bhatt maintained.

To boost operations, the bank will open a new exchange office in Bahrain, as also new representative offices in Dubai and Saudi Arabia.

The bank currently manages two exchange houses in the United Arab Emirates and Oman and has rupee drawing arrangements with 16 exchange houses across the Middle East.

The bank has posted an operating profit of Rs.8.02 billion, up by Rs.1.01 billion from 2003-04. Non-performing assets have been brought down from 5.69 percent to 4.28 percent as on March 31, 2005.

To commemorate its diamond jubilee, SBT has decided to observe the current fiscal as the Year of Rejuvenation, Rededication and Reinvention.

"We are on course to ensure that core banking solutions are implemented in all our 670 branches before September this year," said Bhatt.


(IANS)