Pushing ahead with its fund raising plans to spur volume growth, Chennai-based public sector lender Indian Bank will be raising $1 billion by floating medium term note (MTN) in two or three tranches. The process of issuing debt note will be kickstarted in May and could be wrapped in two-three month?s time, said TM Bhasin, chairman and managing director, Indian Bank.
?The board of directors of the bank on Saturday has given the go ahead and we will be listing the debt securities on the Singapore Stock Exchange,? he told reporters on the sidelines of a press meet to announce the bank?s annual results.
Indian Bank, by floating the note, will be adding close to R4,500 crore to its advance book, which may be mainly set apart for lending through its overseas branches. The bank, as part of scaling up its international presence, especially in Tamil-speaking geographies-has firmed up plans to open three more branches in Sri Lanka in Trincomalee, Hambantota, Batticaloa in 2011-12. It has two existing branches in Jaffna and Colombo.
?We had opened our Jaffna branch in January and have been getting good business through the existing branches. By opening three more branches in the island nation, we will be in a position to attract more business, which may, in turn, be beneficial for the Sri Lankan economy as well,? he said, adding that ?opening of overseas branches does not call for any significant capital investment.? Currently, the bank has three overseas branches in Colombo, Jaffna and Singapore.
On the proposed plan to go for a follow-on public offer (FPO) to raise R1,500 crore, Bhasin said the bank will be kickstarting the process since the annual results are out, though there was some slowdown on account of the adverse market conditions.
?The bank also will be focusing more on NPA recovery as well as retail segment advances this year. The bank has a gross NPA of R740.31 crore as of March 31, 2011. This year we will be structruring our loan book in such a way that it looks sound, by recovering bad loans through local adalats and Sarfeasi,? he said.
Giving the bank?s operations additional technology teeth, it had recently launched three new technology products, including 24-hour e-banking lounge, debit cards for senior citizens and inter-bank mobile payment services (IMPS). ?We will be launching e-banking lounges at nine more branches and will be shifting to our new headquarter building very soon,? said Bhasin.
While the bank?s priority sector advances grew by 19.9% to R25.969 crore, agriculture advances grew by 20.8%. Credit to MSME sector grew by 15.8% to R9,681 crore. Towards development of region-specific new SLPs for MSME sector, it had formulated a scheme for financing textile clusters in Bhilwara region with a relaxed margin.