IDBI Bank is targeting a loan recovery of Rs 4,000 crore in 2023-24, said its managing director and chief executive officer Rakesh Sharma.
The bank had recovered bad loans worth Rs 1,628 crore in April-June. Recovery from written-off accounts was at Rs 91 crore in the quarter under review.
“There is one thing that we need to clarify. Written off account is basically accounting where 100% provisioning has been made. The recovery efforts are continuing of course. But, the extent of recovery varies from account to account. We cannot generalise,” he said.
He added that on an average, there is some haircut because these accounts had suffered losses. The purpose is to maximise recovery and all mechanisms including the NCLT, one-time settlement and sale to asset reconstruction companies are tried.
IDBI Bank had recovered bad loans of around Rs 5,300-crore in 2022-23. The bank has been trying to bring down its bad loans in the run up to its strategic disinvestment, which will likely to be completed in the current financial year.
Its gross non-performing asset (NPA) ratio fell to 5.05% as on June 30 from 19.9% a year ago. Net NPA ratio fell to 0.44% as on June 30 from 1.26% a year ago.
Going ahead, the bank intends its GNPA ratio to below 5% and maintain its net NPA ratio at below 0.5%. But, the bank’s provision coverage ratio rose to 98.99% as on June 30 from 97.78% a year ago as a result of additional provisioning in the June quarter.
“If you see, my slippages have come down in this quarter. Whatever additional provision that we have done is voluntary provision. This has helped us strengthen our balance sheet. It is not because of slippages,” he said.
Sharma could not comment on the progress of the bank’s disinvestment as the process is entirely being managed by the government’s department of investment and public asset management. But he stressed that the focus of the bank would be on improving the assets quality.
As far as the loan book is concerned, the bank intends to maintain a corporate-to-retail ratio at 35:65.
The bank wants to keep on introducing new products depending on the need of the customer and need of the market. The idea is grow at around 12% in retail with a strong focus on asset quality.
On deposits, the bank will increase its focus on individuals, high net worth individuals and institutional accounts.
“Our CASA ratio is 52.6%. Since it is a high interest rate environment, people tend to put more in term deposits. So, our target on CASA ratio is that it should not fall below 50%. Depending on the need, we will of course raise retail, term and bulk deposits.”