Tag: indian bank

Will focus on retail, corporate sectors for credit growth: Shanti Lal Jain, MD & CEO, Indian Bank

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Currently, the bank has RAM-corporate split of 60:40, it may be go up or down 5%.

Indian Bank has more than doubled its net profit for the second quarter and said the focus areas would be improving CASA, quality advances, increasing fee-based income, improving collection efficiency, recovery of NPAs and digitisation. Shanti Lal Jain, MD & CEO, says the bank is adequately capitalised and does not need to raise any funds in near future. Excerpts from his virtual interaction with media.

How do you review Q2 in terms credit growth?

Gross credit of the bank has increased by 5%, led by the retail, agri and MSME (RAM) segment which constitutes 60% of the loan book. Our retail loan growth was around 14%, agri 16% and MSME 8%. RAM as a sector grew by 13%. There was a marginal decrease in corporate loan which was because of under-utilisation of limits being leveraged by the corporates.

Currently, our business growth is around 5% and we think that going forward, it should be between 8% and 10%. We will be looking for opportunities in both the RAM and corporate sectors for lending. Currently, the bank has RAM-corporate split of 60:40, it may be go up or down 5%.

What is your views on the trend on the slippages side? What are your targets on recovery this fiscal?

We have had slippages of Rs 3,952 crore in the second quarter, out of which around Rs 1,800 crore pertains to the NBFC which was recently in the news. If you exclude that, it is a tad above Rs 2,000 crore only. Our collection efficiency has been improving, and looking at the overall trend, we don’t have much worry about slippages. Recovery in the first half was to the tune of Rs 4,800 crore. In the remaining two quarters of FY 22, we are looking at recovering around Rs 4,000 crore. Put together, the recovery for FY22 should be around Rs 8,800 crore. We have Rs 22,000-crore exposure in NCLT and we expect good recovery from the tribunal.

What are your network expansion plans? Any capital raising in the offing?

The bank has rationalised around 250 branches as part of amalgamation of Allahabad Bank into itself. Currently, it has 5,759 domestic branches. We are planning to open about 100 branches in the current fiscal. Our capital adequacy ratio was at 15.88% in Q2 and we are adequately capitalised. In the current financial year, we don’t have any plans to raise capital. The government holding is around 80% and there is headroom for diluting the stake.

Bank has seen good traction in digital transactions. What are the plans on furthering it?

We have floated an RFP (request for proposal) with an objective of changing our operating models. We will be focusing on more digital transactions on both the liability and assets sides. The bank has seen 10% increase in digital transaction mainly due to mobile banking and UPI.

How many accounts will you be transferring to NARCL?

We have identified eight accounts to be transferred to the proposed bad bank, having exposure of close to Rs 1,900 crore. Indian Bank has invested Rs 20 crore in the bad bank.

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Indian Bank more than doubles net profit in Q2

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Public sector lender Indian Bank reported a notable performance across parameters — double-digit growth in operating profit, more than two-fold increase net profit, reduction in net NPA, growth in CASA (current account savings account) and rise in businesses of RAM (retail, agriculture and MSME) sector – for the quarter ended September 30.

The Chennai-headquartered bank, which is now an amalgamated entity of Indian Bank and Allahabad Bank, reported net profit of ₹1,089 crore for the second quarter of this fiscal compared to ₹412 crore in Q2 of the last fiscal, helped by higher operating profit, growth in non-interest income and lower provisions.

Across parameters

Operating profit of the company grew 11 per cent to ₹3,276 crore (₹2,942 crore), on the back of 26 per cent rise in non-interest income at ₹1,966 crore (₹1,558 crore), aided by higher recovery of bad debts and forex income. Its net interest income (NII) fell marginally to ₹4,084 crore (against ₹4,144 crore).

Also see: ‘RBI should allow the rupee to appreciate’

“The bank’s net and operating profits have increased, asset quality is under control, growth is happening in RAM sectors, CASA continues to increase and improvements across functions such as digital banking,” said Shanti Lal Jain, Managing Director & CEO of Indian Bank.

Strong recovery

Total provisions were lower by 14 per cent at ₹2,187 crore (₹2,530 crore in Q2FY21). Loan loss provisions were at ₹2,216 crore (₹1,880 crore).

Fresh slippages were higher at ₹3,952 crore (₹249 crore), mainly due to an NBFC account that accounted for ₹1,821 crore.

“Barring this, slippages of about ₹2,000 crore is just 0.5 per cent of the book. But, higher recovery helped us to maintain the asset quality,” Jain said.

Cash recovery was higher at ₹831 (₹795 crore) and total recovery stood at ₹3,426 crore against ₹1,168 crore. Domestic advances grew 5 per cent to ₹374,508 crore (₹356,627 crore). Retail, Agriculture and MSME loans grew by 14 per cent (₹73,376 crore), 16 per cent (₹82,857 crore) and 8 per cent (₹70,268 crore). The three segments accounted for 60 per cent of advances.

Also see: Mobile payments growing faster than card payments

Total deposits grew 10 per cent to ₹551,472 crore (₹501,956 crore). CASA was maintained at 41 per cent.

Lower NPAs

Gross NPAs was at 9.56 per cent compared to 9.89 per cent in the year-ago quarter and 9.69 per cent in the previous quarter. Net NPA was higher at 3.26 per cent when compared with 2.96 per cent a year ago, but down from 3.47 per cent in the preceding quarter.

“Our SMA1 and SMA2 are decreasing and collection efficiencies are improving. With this trend, we don’t have worries on the asset quality side. Our NII has grown sequentially and we have brought the cost of deposits to below 4 per cent. Therefore, when the economy gradually hits the growth path, our credit growth will also happen. As a result, our interest income will increase,” said Jain.

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Ashwani Kumar assumes charge as executive director of Indian Bank, BFSI News, ET BFSI

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Ashwani Kumar has taken charge as Executive Director of Indian Bank, after serving as the chief general manager of Punjab National Bank in Mumbai.

Kumar, who is a Chartered Accountant, Post Graduate in Commerce and a Certified Member of Indian Institute of Bankers has over two decades of experience.

Kumar rose through ranks serving various offices of four Public Sector Banks viz. Bank of Baroda, Corporation Bank, Oriental Bank of Commerce and Punjab National Bank.

His experience includes working in Wholesale Banking division and serving as Head of several branches (including Industrial Finance Branches, Mid Corporate Branches and Large Corporate Branches).



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Cabinet committee OKs seven appointments of executive directors at six PSBs, BFSI News, ET BFSI

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The Appointments Committee of the Cabinet (ACC) today approved seven appointments of executive directors at six public sector banks, the government said in a release accessed by ETBFSI. All appointments are likely to come into affect from the date of assumption of office.

The appointments will be effective provided that the officials are eligible for extension of the term of office, after a review of their performance by two years, or until further orders, whichever is earlier.

Rajneesh Karnatak has been appointed as the executive director of Union Bank of India for a period of three years. Karnatak is currently the chief general manager of Punjab National Bank.

Roy Joydeep Dutta has been appointed as the executive director of Bank of Baroda for three years, and is currently the chief general manager of the bank.

Nidhu Saxena has been appointed as the executive director of Union Bank of India for three years. Currently, Saxena is the general manager of UCO Bank. Saxena’s appointment can also come into force after February 1, 2022, or until further orders, whichever is earlier.

Kalyan Kumar has been appointed as the executive director of Punjab National Bank for three years. Kumar is currently the chief general manager of Union Bank of India.

Ashwani Kumar, currently the chief general manager of Punjab National Bank, has been appointed as the executive director of Indian Bank for three years.

Yadav Ramjass, currently the chief general manager of Bank of Baroda, has been appointed as the executive director of Punjab & Sind Bank. Ramjass’ appointment will be effective up to his date of attaining superannuation – April 30, 2024 – or until further orders, whichever is earlier.

Asheesh Pandey, currently the chief general manager of Union Bank of India, has been appointed as the executive director of Bank of Maharashtra for a period of three years, with effect from the date of assumption of office on or after December 31, or until further orders.



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Indian Bank to leverage Fisdom tie-up for offering more wealth management products

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Indian Bank has said it has expanded the partnership with Fisdom, a fintech player, by adding new digital products to widen the suite of wealth management products for its customers.

In addition to existing products of mutual fund investment and e-NPS, new digital products such as mutual fund HNI advisory products, digital gold and e-tax filing were on-boarded under the association by way of an agreement, according to a statement.

Imran Amin Siddiqui, Executive Director, Indian Bank pointed out that the bank’s latest initiatives were part of its efforts to upscale business generation through digital channels both for liability and asset products of the bank. “Considering our rich experience of working with various banks and Indian Bank’s commitment to delivering customer delight, we are confident that the partnership will be able to deliver great products, high quality service and a user-friendly wealth management ecosystem to Indian Bank customers,” said Anand Dalmia, Co-founder, Fisdom.

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Here’s a recap of key managerial announcements in top public sector banks so far, BFSI News, ET BFSI

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Public sector banks have been witnessing many changes in their top management, be it extension of tenure or appointment of new key managerial personnel.

The finance ministry had in July asked the Department of Personnel and Training (DoPT) to extend the tenure of a number of managing directors and executive directors to ensure stability and continuity at state-owned lenders.

The Appointments Committee of the Cabinet (ACC), headed by Prime Minister Narendra Modi, has extended the tenure for three managing directors and chief executive officers, and 10 executive directors of public sector banks.

Only one bank, Indian Bank, has appointed its new MD and CEO so far..

Here’s a quick recap of all the noteworthy movements, recommendations and tenure extensions of top PSB officials:

Indian Bank

Shanti Lal Jain was appointed the Managing Director and Chief Executive Officer of Indian Bank for a period of three years. His tenure started from September 1, 2021, and is extendable for two years or until attaining the age of retirement, whichever is earlier.

He replaced Padmaja Chunduru, whose term with the bank ended on August 31. Jain was previously working as the Executive Director of Bank of Baroda.

Meanwhile, the ACC extended the term of Shenoy Vishwanath Vittal, executive director, till the age of superannuation.

PNB

BBB last month recommended Atul Kumar Goel as the MD & CEO of Punjab National Bank, after interviewing 11 candidates.

Apart from this, BBB has kept Ajay Kumar Shrivastava on the reserve list for the post.

Currently, Goel is serving as the MD & CEO of Kolkata-based UCO Bank. He is also on the boards of Star Union Dai-ichi Life Insurance and The New India Assurance.

The government in August extended the term of S S Mallikarjuna Rao, the existing MD & CEO of PNB chief till January 31, 2022. Rao’s term was supposed to end on September 18, 2021.

Further, terms of Sanjay Kumar and Vijay Dube, executive directors, have been extended until their age of superannuation.

UCO Bank

The government may appoint Soma Sankara Prasad, currently the deputy managing director of State Bank of India, as managing director of UCO Bank.

According to PTI, since Prasad was in the reserve list for the post of managing director at Indian Bank, he has been recommended to head UCO Bank. The final decision will be taken by the ACC.

The government had extended the tenure of Atul Kumar Goel for two years. His term was scheduled to end on November 1, 2021.

Bank of Maharashtra

The government extended the tenure of AS Rajeev, MD and CEO of Bank of Maharashtra, for a two years beyond the notified term, expiring on December 1, 2021.

Bank of Baroda

The tenure of Ajay Khurana as executive director has been extended by two years. He is also on the reserve list for PNB’s MD and CEO post. Meanwhile, the tenure of Vikramaditya Singh Khichi, another ED, has been extended until his age of superannuation.

Canara Bank

The tenure of A Manimekhalai, executive director, has been extended by two years.

Bank of India

The tenure of P R Rajagopal, executive director, has been extended by two years. .

Union Bank of India

The government has extended the terms of Gopal Singh Gusain and Manas Ranjan Biswal as executive directors until their age of retirement.

Central Bank of India

The tenure of Alok Srivastava has been extended until his age of superannuation.



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Indian Bank picks up 13.2% stake in NARCL, BFSI News, ET BFSI

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Indian Bank on Friday said it has picked up 13.27 per cent stake in the proposed bad bank National Asset Reconstruction Company Ltd (NARCL). The lender has subscribed to 1,98,00,000 equity shares of NARCL for cash consideration of Rs 19.80 crore, it said in a regulatory filing.

The investment of equity stake of 13.27 per cent would be reduced to 9.90 per cent by December 31, 2021, Indian Bank added.

Three state-owned lenders — SBI, Union Bank of India and PNB — had picked up over 12 per cent stake each in NARCL on Thursday.

NARCL, which is yet to become operational, will take over the bad assets of banks in its own account for speedy resolution of sour loans.

Last month, the Cabinet cleared a proposal to provide government guarantee worth Rs 30,600 crore to security receipts issued by NARCL.

NARCL will pay up to 15 per cent of the agreed value for the bad loans in cash and the remaining 85 per cent would be government-guaranteed security receipts.

It will be 51 per cent owned by PSBs and the remaining by private sector lenders. State-owned Canara Bank has expressed its intent to be the lead sponsor of NARCL with a 12 per cent stake. PTI DP ABM ABM



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Indian Bank inks MoU with NBFCs for priority sector lending

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Indian Bank on Friday announced that it has entered into a memorandum of understanding with three leading non-banking finance companies (NBFCs) and housing finance companies (HFCs) for co-originate loans to the priority sectors.

The Chennai-based lender is partnering with Indiabulls Housing Finance, Indiabulls Commercial Credit and IIFL Home Finance on this co-lending arrangement.

In November 2020, the RBI had issued ‘Co-Lending Model’ guidelines allowing banks to co-lend with all registered NBFCs (including HFCs) to priority sector lending with an aim to improve the flow of credit to unserved and underserved sectors and make funds available to borrowers at an affordable cost.

“The arrangement entails joint contribution of credit at the facility level, by both lenders. It also involves sharing of risks and rewards between the bank and the NBFC for ensuring appropriate alignment of respective business objectives, as per the mutually decided agreement between the bank and the NBFCs,” Indian Bank said in a press release.

The bank expects to generate substantial business under the priority sector through co-Lending during the third quarter of the current fiscal.

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Indian Bank’s festive campaign offers special rates to boost retail loan growth

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Customers can benefit from interest rates as low as 6.80% per annum for home loans while new car loans are now available starting at 6.90% per annum for customers with a CIBIL score of over 750.

In a bid to boost retail sector loan growth in the wake of upcoming festive season, Indian Bank on Wednesday announced the commencement of its Utsav Dhamaka campaign. The campaign gives special offers on home loan, vehicle loan and non-priority jewellery loan products for retail customers. The campaign and all offers will be applicable till the end of 2021 across the country.

Highlights of the campaign include relaxation in the rates of interest for home loans, vehicle loans and jewellery loan schemes along with a blanket 100% waiver of processing charges.

Customers can benefit from interest rates as low as 6.80% per annum for home loans while new car loans are now available starting at 6.90% per annum for customers with a CIBIL score of over 750.

For non-priority jewellery loan products, Indian Bank is offering loans for a tenure of up to 35 months at a fixed interest rate of 8% p.a for all categories of customers, including senior citizens. With such attractive lending rates on offer, Indian Bank is aiming to bring more customers under its fold, and provide a significant boost to customer confidence especially in the upcoming festive period, the bank said in a release.

Vikas Kumar, GM, retail assets, said, “Being one of the largest PSU banks in the country, Indian Bank has been at the forefront in implementing measures and schemes intended at reviving the Indian economy since the onset of the Covid-19 pandemic last year. With the upcoming festive season holding promise, we have launched the campaign with the objective of providing capital to retail customers for their consumption needs at attractive interest rates and value add-ons.”

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Indian Bank, Tamil Nadu govt partner for state’s treasury ops, BFSI News, ET BFSI

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Public sector Indian Bank on Tuesday said it has become the official partner bank for the collection of offline and online treasury for the Integrated Financial and Human Resources Management System. The Integrated Financial and Human Resources Management System is a portal developed by the government of Tamil Nadu to integrate human resources and finance related services providing a comprehensive management system, Indian Bank said in a bank statement.

The public, through the portal, can avail government services related to Tamil Nadu treasuries and accounts, chief auditor of statutory boards departments, small savings, pension, co-operative audit and government data centre, among many others, at a click of a button.

The formal launch of acceptance of funds for IFHRMS through e-challan facility was held in the presence of Chief Minister M K Stalin and senior government officials and representatives of the bank on Monday, the statement said.

“I would like to thank the government of Tamil Nadu for selecting us as one of the two partner banks for their IFHRMS facility that has redefined how state matters of human resource management and finance are handled efficiently through both offline and online means”, Indian Bank, executive director, Imran Amin Siddiqui said.

“We are honoured to be provided with this mandate and have taken this forward by integrating our proprietary V-Collect collection menu with IFHRMS to facilitate real time payment confirmation”, he said.

Indian Bank has a long-term vision of delivering excellence in financial services through customer focus, employee engagement and sustainable business growth.

“This payment partnership with the Government of Tamil Nadu is one of this vision leading to fruition on the bank of Indian Bank’s innovation in technology offerings, providing value to all stakeholders…”, the bank said.



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