The banking industry will continue to struggle with deposit mobilisation, maintaining a healthy current account savings account (CASA) ratio and a possible fall in net interest income after reduction in policy rates, said Shanti Lal Jain, MD and CEO of Indian Bank.
Indian Bank will focus more on high net worth individuals and non-resident Indians, Jain said. He believes these two segments have bigger chances to expand the money base for the bank. It has also been expanding the network of banking correspondents, who look after providing digital services to customers. Currently, the network of banking correspondents stands at 13,000 and the target is to grow the number to 15,000 by the next fiscal. “This is a cost-effective way where we are serving the customer through technology and also with the human touch,” Jain said.
Innovation has always remained at the core and the bank has launched innovative sector-specific products. The lender has also unveiled global support services to improve the marketing network. Owing to constant innovation, Indian Bank has been able to maintain a growth of over 42% in CASA, the MD said.
As around 60% of the book is linked to the marginal cost of funds-based lending rate (MCLR), the impact of a possible rate cut is likely to be minimal. It has been able to grow a healthy investment book, giving returns of more than 7%.
To expand reach and customer base, the bank has been collaborating with companies to provide loans under various government schemes. Recently, it collaborated with Tata Power to provide loans for solar pumps under the Pradhan Mantri Surya Ghar Muft Bijli Yojana. Similarly, there are collaborations with Maruti and M&M for auto loans. The bank is open to more such collaborations, Jain said.
Indian Bank has the board approval to raise around Rs 5,000 crore in the current fiscal. If there are opportunity and need to mop up funds, it may tap the market, Jain said. As of now the bank is adequately capitalised.
By the end of FY25, Indian Bank will add 100 branches to the current network of 5,800. The focus is on opening branches which will primarily cater to small and medium enterprises
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