IDBI Bank bullish on UP agri sector, aims to utilise untapped potential

IDBI Bank is bullish on Uttar Pradesh's agricultural sector and has drawn up a blueprint to leverage the untapped potential in the state's agricultural and allied activities. The other areas of focus are the state's industries and digital banking space.

A strong focus area for the bank has been priority sector lending in UP, particularly in the agriculture sector and allied activities, IDBI Bank Deputy Managing Director K P Nair said here on Thursday.

So far, IDBI Bank has set up 208 dairies in UP by financing various allied schemes, including the flagship Kamdhenu Scheme that seeks to boost the state's dairy segment.

"Under the Agri-Junction Scheme, 162 units have been set up across the state. These initiatives have not only yielded employment but have also given a strong boost to agriculture and allied segments by ensuring the well-being of farmers,” Nair added.

IDBI Bank has a network of 121 branches and 211 ATMs in UP. The bank’s priority sector lending in the state grew by 46 per cent over the last financial year. Agricultural lending and allied activities posted a growth of 53 per cent, while lending in the micro, small and medium enterprises (MSME) space expanded by five per cent. 

Meanwhile, the bank has rolled out an aggressive “turnaround strategy” focusing on creating a robust retail portfolio, enhancing capital base, and strengthening its customer relationship.

While 2016–17 posed challenges, the bank’s major thrust would be on rebalancing the business portfolio in the near future. The bank would tap emerging opportunities to grow its business and to also propel the retail and priority sector books, he said.

"The bank has crafted a recovery approach to get back on the path of growth and profitability. Our focus will be on increasing our retail footprint, making innovations in our digital offerings, boost lending in priority sector, aggressively seek resolution of non-performing assets (NPA), and take all possible steps for augmenting capital base,” he added.

Earlier, IDBI Bank had constituted a new vertical comprising 100-odd personnel to recover mounting NPAs, which currently top Rs 45,000 crore. Also, the bank has created a 'Credit Monitoring Group' to sniff out potential NPAs for early resolution.

The Reserve Bank of India (RBI) had already clubbed IDBI Bank with Dena Bank, Indian Overseas Bank, and UCO Bank under the PCA (prompt corrective action) segment due to their mounting NPAs. PCA is a supervision tool for public sector lenders with a high amount of NPAs.

Meanwhile, Nair said that the bank had clocked a rising share in retail advances to 43 per cent as at end-March 2017 from 33 per cent at end-March 2016. The Bank’s CASA deposits, as well as its retail term deposits, grew by 22 per cent during the year. The share of CASA deposits and retail term deposits also increased to over 31 per cent and 32 per cent, respectively, during the year.