IDBI Bank plans to slash its net non-performing assets (NPAs) to zero by March 2019 from 4.60% in Q3 FY16, as part of its major revamp plan, MD & CEO Kishor Kharat said on Tuesday. As part of the plan, the bank is also looking at introducing employee stock ownership plan (ESOP) and to revise employee wages.
The revival strategy comes a day after the government announced it could reduce its stake in IDBI Bank below 50%. At present, the government owns 80.16% of IDBI Bank.
The plan, being discussed for the last six months, was approved by the board at a meeting held on February 18-19.
“The plan rests on business growth. In the past, one thing bothering us was low business volumes,” he said, adding that while the industry was growing at 12-14% IDBI Bank grew at a rate of at 5-6%.
Kharat admitted that the bank is far behind the industry and is now looking to catch up. “In the next three years we will ramp up our business activities,” he said. The bank plans to reduce its dependence on manual processes and digitise. It also plans to expand its branch network to 4,000 from 1800 branches at present.
Of the 2,000 new branches, 1,500 will be through low cost models. “More focus will be given to high rated clients and to add more higher credit-rated clients in our books so that overall profile improves and help us in conserving capital,” he explained.
The bank has lined up around R3,000 crore of non-core assets for monitisation. Of which, nearly Rs 1200-1,500 crore will monetised in March. The remaining stakes IDBI capital, IDBI AMC, IDBI Federal. “These are all our associates and subsidiaries and we would like to list them and right now we will monetise to the extent of our need,” he said.
It will reduce concentration of business, both industry wise and borrower wise.