IDBI Bank goes for operational rejig after LIC deal

It intends to shift focus from corporate lending to retail, and aspires to raise share of retail banking portfolio to 70% from 50% at present in 5 years

Operational rejig: IDBI Bank seeks bids from consultants
Operational rejig: IDBI Bank seeks bids from consultants
Operational rejig: IDBI Bank seeks bids from consultants
Operational rejig: IDBI Bank seeks bids from consultants

IDBI Bank on Wednesday sought bids from consultants to carry out an organisational restructuring and help tap synergies between the lender and its new promoter, Life Insurance Corporation (LIC) of India.

LIC completed the acquisition of a 51% stake in IDBI Bank on January 21. The Reserve Bank of India (RBI) classified the lender as a private sector bank on March 14.

In the request for proposal (RFP), IDBI Bank said it intends to shift its focus from corporate lending to retail and aspires to raise the share of its retail banking portfolio in its loan book to 70% from 50% at present over the next five years. “This needs enhanced growth trajectory. In this context, the bank needs to embark on a comprehensive retail business build with a clear multi-fold mandate to achieve diversified product mix, realise synergies owing to LIC deal, increase share of digitally initiated sales, improved customer and employee experience, reducing turnaround time resulting in improved business and operating ratios to build a bank of the future,” IDBI said in the RFP.

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The increase in business and retail focus would require a redesigning and re-alignment of the organisational structure of the bank at the field level, corporate office levels and key back offices, such as retail asset centres (RACs), retail asset operations (RAO) and credit processing centres (CPCs), IDBI said in the document. With the change in majority ownership, functioning of the bank will also see a shift on some aspects of human resource management, such as talent and performance management.

“The selected consultant, inter alia, can help suggest suitable changes in systems, processes, technological architecture and such other matters considered appropriate for ensuring sustenance of such synergistic business benefits,” IDBI said in the RFP, adding that the selected consultant should also identify gaps in existing business practices with particular reference to risk management, compliance and governance and suggest necessary changes.

IDBI Bank has an aggregate balance sheet size of `3.33 lakh crore and its total business stood at `3.82 lakh crore, as on December 31, 2018. The size of its branch network was 1,894 on the same date.

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