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We are targeting to recover Rs 8, 000 crore this fiscal: Indian Bank MD and CEO Shanti Lal Jain


Indian Bank is taking multi-layered approach to achieve consistent business growth, starting with building capabilities and streamlining operations. The bank’s approach has shifted from conventional to digital banking to save time and resources, MD and CEO Shanti Lal Jain tells Sajan C Kumar in an exclusive interview. Excerpts:

What are your plans for FY23 in terms of priorities for the credit growth and business generation?

Indian Bank is basically a retail bank, 61% of our loan book is occupied by retail, agri and MSME (RAM) and all these segments are contributing to our advances growth. We had advances growth of 9% this quarter and we expect a 10% growth in advances for the entire year. We are getting good margins from the RAM sectors. We are also looking at the corporate sector in a big way. In the first quarter, we have sanctioned corporate term loans of Rs 19,000 crore waiting to be disbursed. We are also open to participate in big-ticket consortium-based lending as we believe that the economy is opening up and the demand for credit has risen. If our corporate books grows, there could be two or three percent decrease on the retail side.

How much recovery do you expect by the end of FY23, especially from NCLT and NARCL?

We are targeting to recover Rs 8, 000 crore in FY23 i.e. Rs 2,000 crore per quarter on an average. In Q1 itself, we have exceeded our quarterly goal and going forward we will be able to achieve the set target. In FY21, we recovered Rs 5,500 crore and in FY22 we had recovered Rs 7,100 crore. Notably, while our gross NPAs and net NPAs are coming down, fresh slippages are also decreasing, and it will lead to lesser accumulation of sticky assets.

In NARCL, in the first phase, the bank has identified 8 accounts aggregating Rs 1,910 crore. In the second  phase, 9 accounts amounting to Rs 1,280 crore have been referred to the bad bank. In the 8 accounts of phase 1, three were resolved. The bank has invested Rs 139.49 crore as equity in NARCL. We are expecting around Rs 2,000 crore from NCLT. We are also looking at recoveries from other modes like compromises and one-time settlements.

How is your CASA position? What are the plans to enhance it?

We have grown CASA by 8% as we have been aggressively opening various types of accounts, including salary. In addition, we have focused on opening fee-collection accounts with various schools and universities, apart from ones related to government schemes. The share of domestic CASA to domestic deposits was 41.29% on June 22, against 41.42% a year ago. The CASA growth was driven by 14% growth in current account deposits and 7% growth in savings account deposits.

How is capital adequacy rate? Do you need to go for any fund-raising?

We are very comfortable in capital. Our capital adequacy ratio is at 16.51% and we are having 150% of the regulatory requirement. In this scenario, I am getting the benefit of capital conservation and the profitability is also supporting us. The bank’s risk-weighted assets, or RWA, is coming down as we are taking better-rated accounts. The economy is picking up and there is an upgrade in ratings as well.

It appears that you are bullish on gold loans?

We have big plans for gold loan as it is a margin-driven business for us. We have set up 421 new gold loan specialised outlets across branches and have a Rs 55,000-crore portfolio. We want to replicate the success model of south India to other parts of the country. Opportunities are there and we have developed expertise over a period of time. In Q1FY23, the gold loan book grew 42% on retail portion and 16% on the agri front.





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