Indian Bank has decided not to postpone any default with the repayments. The bank has also been reaching out to borrowers in order to avoid potential defaults. But like many others, Indian Bank, too, is receiving low response for restructuring. “We were expecting corporate and retail both to apply for restructuring schemes. But now there is a low response from the retail segment. On the corporate side, a few are showing interest, said Padmaja Chunduru, MD & CEO, Indian Bank.
She added that recovery has been improved in the last two months.
Credit Growth Outlook
Chunduru explained the growth from April to September was very low. But things have started to improve now. “Infrastructure has been picking up since September- October. We are expecting a good performance in the coming two quarters. We can see the growth of 8-9% going ahead,” she said
Indian Bank focus on Mid Corporate
Indian Bank has set up dedicated branches to serve the mid and large corporates. The bank now has the benefit of having Allahabad as a part of its balance sheet.
“Proposals directly move to the decision making authority. With amalgamation of Allahabad Bank we have a bigger balance sheet. So we have much more strength and size to lend to large corporates in a bigger way. We are better placed for retail and corporate both,” she explained
She added, “We have set up a dedicated mid corporate vertical. There is enough potential to look at. Between MSME and SME, there is a mid corporate vertical that will focus on getting more business for the bank. It’s a new vertical and we expect 10% growth here. Any loan above Rs 250 crore will be part of this segment. We want to focus on this because naturally they will become large cooperates in the near future.”
Strategy after the amalgamation
According to the bank, the amalgamation of Indian Bank and Allahabad Bank has been done successfully.
“We have already merged 153 branches. The currency chest, service branches have already been merged. Despite pandemic, employees moved from Allahabad to Chennai (the HQ of Indian Bank). Many of the lease premises have surrendered and cost has been synergised. IT is also progressing very fast and it will be done within a month. Merger has been smooth and seamless with the customers. Now we have a good reach in UP, Bihar and other states,”
Retail Loan growth
The big portfolio of Indian Bank’s loan book belongs to the retail segment.
“In the retail segment 80% chunk comes from the home loan segment. Currently, home loan segment is picking up slowly and I believe it will be back to normal in Q4. In the home loan segment, Tier-3 and Tier 4 cities are doing much better than metros. Even millennials are buying homes in these cities.”
Indian Bank has an exposure in education loans, but its suffering as currently due to the pandemic, even western universities are not fully operational… added Chunduru.
FinTech and Startup Partnerships
Bank believes that with constant innovations being done by startup and FinTech, new sectors will emerge and that Indian Bank should be ready into tap that market.
“We have partnered with IIT Madras, for startups. We are looking for partnerships with FinTechs on the lending side. We are working with FinTechs in various segments, i.e. agriculture, fisheries, gold loan, etc. In future once approvals are in place we are also open to make equity investments in such startups and FinTechs, Chunduru said.