Indian Overseas Bank (IOB) is targeting to raise around $1 billion through Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits and Overseas Foreign Currency Borrowings (OFCB). MD & CEO Ajay Kumar Srivastava speaks to Narayanan V about the bank’s fundraising plans, credit growth outlook and key priorities post tenure extension. Edited excerpts:
What is your FCNR(B) deposit mobilisation target?
We have more than 4.52 lakh NRI customers and four overseas centres. Our legacy NRI customers already have deposits of around $350 million on our books. Since the RBI announced the scheme a month ago, we have mobilised another $300 million. Our intention is to mobilise around $1 billion.
We are targeting around $600-650 million in FCNR(B) deposits by September-end, with the balance coming from OFCB. The FCNR(B) window closes in September, while the OFCB and ECB windows are expected to gain traction from October onwards.
How prepared is the bank for the Expected Credit Loss (ECL) framework?
Our estimate is that we may require around ₹3,000 crore of additional provisions once the ECL framework is fully implemented in April 2027. Out of this, we have already created floating provisions of Rs 2,150 crore in our balance sheet as of June 30.
During this quarter, we provided ₹400 crore and intend to make another Rs 300-400 crore of provisions by the end of this financial year. By then, we expect to have a kitty of more than Rs 3,000 crore of floating provisions dedicated to meeting the ECL requirement.
What is the bank’s exposure under ECLGS 5.0?
We have a total eligible universe of around ₹4,500 crore under the ECLGS scheme. So far, we have sanctioned and disbursed around ₹2,600 crore. Over the next one-and-a-half months, we expect the entire ₹4,500 crore of eligible accounts to be covered.
What is your credit growth outlook for FY27?
We intend to grow credit in double digits, around 12-13% year-on-year, but that is the minimum we will do. Over the last three financial years, our credit growth has been around 20% annually.
Since 80% of our credit portfolio comprises the retail, agriculture and MSME (RAM) segment, I expect most of the growth to come from these businesses. The remaining 20% will come from overseas operations and the corporate portfolio.
What are your priorities after your tenure was extended till October 2027?
The extension was granted by the government on January 1, 2026. The AGM approval was only a ratification. Having said that, my strategy remains the same. We are a commercial organisation, so we have to deliver growth in both assets and liabilities while improving profitability. Asset quality has to improve further.
On the liabilities side, we will continue to focus on CASA, which is a lower-cost source of funds. Containing slippages remains one of the bank’s top priorities, and we have been successful in doing that for the last 10-11 quarters.
For the first time in IOB’s history, our business grew by more than Rs 1 lakh crore in a single financial year during the previous fiscal. If we add another Rs 2.5 lakh crore to our existing business of around 7 Rs lakh crore, we should, on a conservative basis, be close to Rs 10 lakh crore over the next two years. Of course, I may not be there by then, but whoever succeeds me should be able to take the bank’s business close to the Rs 10 lakh crore milestone.
