Bank of Baroda remains optimistic about growth despite a cautious credit guidance owing to geopolitical uncertainties and a weak monsoon. In an interaction with Kshipra Petkar, Managing Director and CEO Debadatta Chand discusses FCNR(B) deposits, corporate lending, M&A financing, and the bank’s Vision 2030. Excerpts:
You have already mobilised around $700 million through FCNR(B) deposits and expect this to cross $1 billion by the end of the month. Which regions are these flows coming from, and are they largely fresh inflows?
The flows are coming from across geographies where we operate, including the UAE, and are well diversified. Roughly half the inflows are from existing deposits being repriced, while the remaining are fresh deposits. We expect fresh inflows to pick up significantly in August and September, and our overall target is to mobilise around $4-5 billion under the measures by RBI.
You have guided for 12-14% credit growth and 10-12% deposit growth. Why have you adopted a cautious stance?
We want to assess two evolving factors before revising our outlook — the geopolitical situation and the progress of the monsoon. We have consistently met or exceeded our guidance in the past, and I would rather overperform than underperform. I remain hopeful of achieving more than 14% credit growth for the full year, but I would like to watch one more quarter before considering an upward revision.
Which segments do you expect to drive loan growth over the coming quarters?
We continue to see broad-based growth. Retail, agriculture and MSME will remain key growth engines as we continue to retailise our loan book. Corporate credit growth is likely to moderate from current levels to around 11-12% over the full year, but it will still remain healthy.
Are you seeing strong demand from newer sectors such as renewable energy and data centres?
Our renewable energy portfolio is growing at over 50% year-on-year, while data centre financing is expanding at 30-40%. Mid-corporate lending is also growing at around 25%, and demand across industrial sectors remains healthy.
Following your partnership with Mizuho Bank, how do you see the M&A financing business evolving?
We are evaluating three to four proposals at present. We have already created a dedicated team for M&A financing because our global presence gives us the capability to participate in such transactions.
What progress have you made under ECLGS 5.0?
We had targeted sanctions of about Rs 12,000 crore. So far, we have sanctioned around Rs 11,000 crore, disbursed Rs 7,500 crore and have another Rs 3,600 crore in hand.
What is the timeline for your pension fund and primary dealership businesses?
We have received most of the regulatory approvals for the pension fund business, and we expect it to go live around September or October. Our primary dealership subsidiary is also expected to become operational during the third quarter.
Following your reappointment for another three years, what will be your key priorities?
Our focus under Vision 2030 will be on embedding digital capabilities into our core operations, expanding digital lending, redesigning branch operations through digital branches and improving our cost-to-income ratio. While balance sheet growth remains important, operational efficiency, technology and fee-based businesses will be the key drivers of the bank’s next phase of growth.