IDBI Bank has launched an aggressive turnaround strategy with a focus on recovery of bad loans and prevention of further slippages.
IDBI Bank has launched an aggressive turnaround strategy with a focus on recovery of bad loans and prevention of further slippages. Given the stress in the corporate sector, the bank will restrict growth in the corporate loan book and focus on increasing retail and priority sector asset base. This will help the bank to reduce risk weighted assets and improve CAR in the short term. Also, the bank will look at reducing its operational cost and sell non-core assets over a period of time. The bank will also look at building a robust retail portfolio, enhancing capital base and strengthening customer relationship. GM Yadwadkar, deputy managing director, IDBI Bank, said, “The bank has crafted a comprehensive turnaround strategy to get back on the path of growth. Accordingly, our focus will be on increasing our retail footprint, further enhance our lending in priority sector, aggressively seek recovery of NPAs and take all possible steps for augmenting our capital base.”
As part of their turnaround strategy, the bank has announced formation of a separate vertical having around 100 dedicated staff to recover their mounting non performing assets (NPAs), which now stand at around Rs 45,500 crores. “This vertical will focus only on reducing our NPAs by way of cash recovery as well as sale of NPAs,” Yadwadkar added.
Also, the bank management has formed a ‘credit monitoring group’ to find out potential NPAs based on early warning signals, said Yadwadkar.
While 2016–17 posed challenges, the bank’s major thrust will be on rebalancing the business portfolio in coming months. The bank will tap emerging opportunity to grow its business, with a focus on propelling notably the retail and priority sector book.
In fact, the bank has made headway as evidenced in the rising share of retail advances to 43% as at end-March 2017, from 33% as at end-March 2016. The bank’s CASA deposits as well as retail term deposits grew by over 22% during the year. Also, the share of CASA deposits and retail term deposits increased to over 31% and 32%, respectively, during the year.
Reimagining the customer experience in an increasingly digital world is another key area. The bank introduced innovations such as UPI app ‘PayWiz’, social media banking ‘Facebook – iEngage’ for retail internet banking customers and digital passbook ‘mPassbook’ on the Android platform.
At present, IDBI Bank has a network of 110 retail branches, 4 retails assets centres, 7 trade finance centres, 1 currency chest and 217 ATMs in Gujarat, Dadara Nagar Haveli and Daman & Diu. In addition, it has 4 specialised corporate branches. The branch network is further augmented with the appointments of business correspondents (BCs) where we have no presence.
IDBI Bank has total deposits of Rs 11,246 crore and total advances of Rs 10,116 crore for Gujarat as on March 31, 2017. The bank is aggressively contributing to various government schemes like PMJDY, PMMY, Stand Up India; and social security schemes such as PMJJY, PMSBY and APY, etc.