Indian Bank’s new chief wants to flip the playbook to focus on the small guns
Subscribe to enjoy similar stories. Mumbai: A month in as the new chief of Indian Bank and Binod Kumar is looking to flip the state-run lender’s playbook albeit at a cautious but steady pace.
Amid concerns about a potential slowdown in the personal loans segment, Kumar wants to prop up what’s currently the smallest contributor to the bank’s ‘RAM’ portfolio—industry speak for retail, agriculture, and micro, small, and medium enterprises, or MSMEs. Kumar’s eventual goal is for Indian Bank’s MSME loans to outpace its retail and agriculture loans.
Currently, agriculture loans account for about 25% of Indian Bank’s total domestic loans outstanding of ₹5.2 trillion, followed by retail loans at 21% and MSME advances at 17%. “My vision is to increase the share of MSME loans from 17% to at least 20% in the next 2-3 years," Kumar said, explaining that an increased focus on high-yielding MSME loans would aid in improving the lender’s yield on advances supported by some other high-yielding agriculture and corporate loan segments.
“We would particularly like to increase our exposure to MSME loans and have taken various initiatives for this," said Kumar, a former Punjab National Bank executive director who took charge as managing director and chief executive officer of Indian Bank on 16 January. Also read | The plague of souring small loans is back Indian Bank’s yield on advances in the December quarter was 8.92%, higher than 8.77% in the preceding three months and 8.78% a year ago.
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