Indian Bank Aims To Recover Rs 7,000 Crore In FY25

Public sector undertaking Indian Bank is aiming to recover close to Rs 7,000 crore during the current fiscal, a top official said on Tuesday.

The Reserve Bank of India gave official approval to the bank and shareholders to raise Rs 5,000 crore, which is to be decided at a favourable time, according Chief Executive Officer and Managing Director Shanti Lal Jain.

The Chennai-headquartered bank reported a 41% jump in its net profit to Rs 2,403 crore for the April-June 2024 quarter due to a decline in bad loans. It had earned a net profit of Rs 1,709 crore in the corresponding quarter of last year.

"Last time, we recovered about Rs 8,700-Rs 8,800 crore. But what happens is slowly, this number may come down and this time we have planned that we will be making a recovery of around Rs 7,000 crore," Jain told reporters.

A recovery target of Rs 7,000 crore for the financial year translates to Rs 1,750 crore per quarter, he said. The bank recovered Rs 1,937 crore in the April-June quarter. The recovery amount is expected to exceed the slippages for the current fiscal, Jain said.

According to bank officials, the slippage ratio contained to 1.50% in June 2024 as compared to 1.57% in June 2023.

On fund raising, Jain said the bank's capital adequacy is 16.47% and with the net profit of Rs 2,403 crore for the April-June 2024 quarter, the capital adequacy ratio is 17.08%.

"Point is, the bank is adequately capitalised. Basically, the bank is able to take care of capital needs. We have board of directors approval, shareholders approval to raise Rs 5,000 crore through equity and Rs 2,000 crore through tier II bonds and Rs 5,000 crore of infra bonds during this financial year," he said.

"That approval is with us and at the opportune time within the financial year we will take a call on this," he said.

To a query on how much the bank was looking to recover through ARC, he said last year the bank made about Rs 464 crore and this financial year also it would be around Rs 400 crore of recovery.

The bank opened about 77 branches last year and this year it has planned to open 100 branches, Jain said.

It is focused on delivering value-added and suitable solutions with the smart use of technology to customers, the top executive said. Through a combination of cutting-edge technology and personalised service, we aim to simplify banking, making it more accessible, convenient and secure, he said.

The bank has launched its omni-channel banking application INDSMART— which offers a wide range of services including banking services and e-shopping facilities to customers.

This application has several features like integrated bill payment, e-shopping, business planner providing a seamless and enriched experience for customers, he said. Customers would also be able to avail loan facilities or open fixed deposits and savings accounts through the application, he said.

Indian Bank made a business of Rs 36,678 crore through digital channels in April-June 2024 quarter. Mobile banking users grew by 33% year-on-year reaching 1.75 crore customers.

UPI users (1.85 crore) and net banking users (1.09 crore) have grown by 30% and 26%, year-on-year, respectively, he said.

(With inputs from PTI).