‘Indian Bank well-capitalised today’

Interview of M K Bhattacharya, Executive Director, Indian Bank

Excerpts from an interview with M K Bhattacharya, Executive Director, Indian Bank

Q. Indian Bank is reasonably well capitalized today.  What are your growth plans now?

A. In terms of the Board approved Business plan for 2018-19 and relative strategies, the focus would be on CCA – CASA, Credit (focus being on RAM Sector) and Asset Quality.

On the liabilities side, focus would be on mobilizing low cost deposits; especially Current Account.  Growth of Term deposits would be broad based with a large proportion of retail deposits through new relationships.

Loan book would be rebalanced with growth primarily driven by RAM sector (Retail, Agriculture & MSME) where the focus would be on acquiring quality accounts following a process of due diligence and supported by  proactive, dynamic and systemic risk management practices.  Lending to Corporates shall be sector specific with risk based pricing to create a diversified portfolio of top rated Corporates.  Maintaining the quality of assets would be accorded top priority.  Further, containing slippages and accelerating recovery will receive constant attention.

Q. Indian Bank has raised Rs.2.90 billion under Basel III compliant Tier 2 bonds recently, as part of its plans to raise bonds upto Rs.10 billions in one or more tranches during the current or subsequent years.  Any particular reason for raising capital through bonds?

A. The bank is well-capitalised today, both for meeting its regulatory as well as growth requirements. Umbrella approvals from Board and Shareholders are available for raising capital in more tranches based on the requirement.  Tier II bonds of Rs.6.00 billion were raised during 2016-17 and the present bond raising of Rs.4.00 billion is in continuation to that. The capital raised would be maintained as a buffer to support the objectives of the Bank in its pursuit for qualitative business growth.

Q. It was learnt that Indian Bank’s focus will be on achieving risk diversification across sectors.  Can you name some of the sectors where the Bank intends to lend.

A. Bank’s strategy would be to rebalance the Loan Portfolio for improving profitability, diversify risk across sectors and geographies in accordance with laid down risk management principles.  There would be an increased focus towards RAM Sector for which necessary growth enablers have already been put in place in terms of infrastructure, bouquet of products and competitive rates, supported by technological capabilities.  Lending to highly rated Corporates whose business the Bank understands would however not be lost sight of.

Q. What new technological capabilities the Bank has been looking at to enhance customer experience?

A. Bank is implementing the following technologies/solutions to enhance customer service.

·         Artificial Intelligence enabled chatbot on website to address customer queries

·         Data analytics to enable right positioning of products to customers

·         Loyalty rewards programme for increasing relationship with customers

Bank is also exploring the following technologies/solutions to enhance customer experience.

·         Phone Banking

·         Tie-up with Fintech companies

·         Loan Origination system to improve Turn Around Time (TAT) for sanction of loans.

Q. Any plans to open new branches?

A. Branch opening has been an ongoing activity for the Bank with focus on profitable centres and emerging growth pockets where opportunities for business abound.  In keeping with the business strategy of the Bank, areas with high propensity for CASA and demand for Retail loans would be the ideal choice. Being a South based bank with a firm grounding already, we look beyond at potential regions outside to expand our footfall.