While the amalgamation with Allahabad Bank proved a difficult physical exercise, the combined entity is prepared to make the most of its pan-India presence and much better attain, Padmaja Chunduru, MD & CEO, Indian Bank, tells Sajan C Kumar. Excerpts:
How difficult has the approach of merger with Allahabad Bank been, specifically in the midst of the pandemic?
The Covid-19 crisis struck in the middle of the approach to merge Allahabad Bank with Indian Bank, forcing us to bring to bear all the practical experience and capabilities one had acquired more than the years. For this knowledge, I would like to thank SBI and Indian Bank which served as my instruction ground. We could not have shifted or transferred individuals that the amalgamation approach referred to as for at the time of a public crisis. IT integration was a different challenge. If we could go by way of with the physical exercise, it was only mainly because of continuous communication among the banks. Planning is one point, but execution is very a different. You require to retain checking no matter if every thing is taking place as per the strategy.
What are your priorities for general credit development and enterprise generation in FY22?
With the merger approach executed effectively, we have a pan-India presence and that tends to make us a great deal more confident about our prospects. We now have a strong presence and will acquire from much better client-connect, a larger quantity of branches, world wide web and mobile banking, and, most crucial, enterprise correspondents (BCs) supplying us at least 20,000 touch points.
I feel Indian Bank is poised to take benefit of the position it is in now. There has been steady development in our enterprise in the very first 3 quarters of FY21 and the NPA numbers are on a downward trajectory. We have a RAM (retail, agriculture and MSME) portfolio of 56% and a corporate portfolio of 44%, which tends to make for a very good mix. There’s adequate scope to strengthen in any of these segments, even though, with the combined balance sheet supplying us sufficient exposure to nicely-rated organizations, the corporate side is stronger.
What would your lending tactic be? While RAM tends to make for the bigger chunk now, is there any strategy to develop the corporate share?
We have positioned the bank to take benefit of corporate lending possibilities, each funded and non-funded, setting up 14 massive corporate branches and 38 mid-corporate branches. We have taken working capital consortium membership and term loans to nicely-rated and nicely-identified corporate homes. We count on to develop the corporate portfolio by 12% in the next fiscal. In Q3 of this fiscal, we could develop the corporate pie by 7% as enterprise was subdued. We have also carved out a mid-corporate vertical to concentrate on the Rs 150- 500 crore segment. In corporate lending, one has to choose wisely. The credentials of the promoter are crucial whilst granting a corporate loan. In the RAM segment, exactly where we are the market place leader, we count on to develop by 12-14% in the next fiscal.
Having a tight leash on NPAs and placing in spot a robust recovery approach is crucial these days. What are your plans on these fronts?
Arresting slippages and going complete throttle on recoveries have been portion of the bank’s DNA. In the two-and-a-half years I have been with the bank, slippages have been brought down quarter by quarter. For recovery, we have two teams, one working from Chennai and the other out of Kolkata. We hope to recover Rs2,000 crore without the need of NCLT and right after taking that approach into account, the figure will be about Rs 4,500 crore by the finish of this year. We are also conducting e-auctions of true estate properties and other recoveries beneath the Sarfaesi Act and the physical exercise is gaining traction progressively. We are also going back to door-to-door visits by basic manager-level officials to recover smaller sized loans. This is a sort of name-and-shame tactic to stress defaulters to clear their dues.
What is your present capital adequacy ratio? Are there any plans to raise capital?
The capital adequacy ratio for the December quarter was at 14.16% and even if you issue in the NPAs of the standstill period, it would come down by only 10-15 bps. Moreover, this does not consist of the Rs 2,000 crore we had raised in January 2021. If that is incorporated, it will go beyond 14%. We are undertaking two points now.
One, we are watching our asset portfolio to assess the threat-weighted assets and that is getting optimised or controlled accordingly. Two, we have raised Rs 4,000 crore and the board has authorized additional capital raise of about Rs 4,000 crore by way of QIP, FPO or other indicates. We hope that the share value of the bank will quickly touch its book worth and we will be in a position to go for the capital raise by the very first quarter of the next fiscal.