After the amalgamation of Allahabad Bank into the Indian Bank, the former has started taking various steps including organisational restructuring, diversifying loan books, emphasising on digital banking, changing the strategy to have lesser dependence on PDs/CDs and replace it with retail deposits among others.
The amalgamation of Allahabad Bank into the Indian Bank has placed Indian Bank as the seventh-largest bank in India with more than Rs 8.50 trillion business, 43,000 strong workforces and over 6000 branch networks with a strong CASA base.
The future road map for the Bank will be towards the consolidation of business with a focus on profitability, said Padmaja Chunduru, MD & CEO, Indian Bank.
She said key rationale for amalgamation include larger balance sheet size & optimised capital utilisation, wider geographic reach leading to deeper penetration, access to larger talent pool, sharing and scale of product capabilities and platforms, with greater cross-sell across segments and increase in operational & process efficiencies through scale benefits and elimination of duplication.
On initiatives taken post amalgamation, in a communication to the shareholders, she said that restructuring the corporate office verticals headed by general managers to improve the efficiency of control.
The bank also created additional Field General Manager Offices and Zones to help in driving the bank's business more effectively while establishing Large Corporate Branches (LCBs) and Mid Corporate Branches (MCBs) to cater to the needs of the corporate and mid-corporate borrowers.
She added, a centralised processing unit for MSME and RAM has been set up, while strengthening the Credit Monitoring Department and Recovery Department with new centers at Kolkata and Chennai.
As part of diversifying the loan book, Indian Bank is positioning for taking exposure in well-rated large and mid-level corporates. The new change in the strategy is to have lesser dependence on PDs/CDs and replace it with retail deposits. She noted fresh inflows of Rs 40,251.74 crore in 2019-20.
Chunduru said, the prime focus this year would be on increasing CASA, curtailing cost, increasing revenue other than from interest, accelerating recovery in respect of impaired assets and containing the level of NPA. The growth in business would culminate into improving the bottom line.
Going forward, the bank identified key areas for thrust would also include loan growth under RAM sector with a focus on higher-yielding advances, soliciting high rated corporate accounts offering good yield, conserving capital, pursuing best risk management practices, a quantum jump in non-interest income, reducing operating cost, increased use of alternate channels through innovative technology offering.
On improving efficiency, she said, the focus will be on rationalisation of unviable and slow growth branches, unlocking value in subsidiaries of the Bank viz., Ind Bank Merchant Banking Services Ltd. and Ind Bank Housing Ltd, centralisation of HR/Corporate credit/Recovery verticals & Forex trade processing units.
The co-origination of loans in collaboration with NBFCs, exploring cross-sell options through tie up with insurance companies for sale of bancassurance products, life & non-life, ramping up MSME lending through TReDS platform, tie up with Builders/Vehicle dealers and Tractor manufacturers
"Efficient customer service will continue to be the focus area with frequent employee and customer connections. In view of the Covid-19 situation, aggressive promotion of digital channels will be encouraged," said Chunduru.
Pointers
* Combined entity has 6101 branches with scope for improvement in the western region of Gujarat & Maharashtra
* Combined entity is supported by the micro-level touchpoints viz., 9128 business correspondents
* Network will help the bank to make further inroads contributing to the financial inclusion in the Rural/Semi-urban areas
* Restructuring the Corporate Office verticals headed by General Managers to improve control efficiency
* Creation of additional Field General Manager Offices and Zones would help in driving the Bank's business more effectively
* Establishing Large Corporate Branches (LCBs) and Mid Corporate Branches (MCBs) to cater to the needs of the corporate and mid-corporate borrowers.
* Focus on RAM – Centralised processing units for MSME and RAM
* Strengthening Credit Monitoring Department and Recovery Department by establishing centers at Kolkata and Chennai.
* Positioning for taking exposure in well-rated large & mid-level corporates.