Indian Bank aims to recover Rs 1200 cr bad debts
Government nod awaited for capital restructuring
| Indian Bank had almost halved its gross non-performing assets (NPAs) to 3.96 per cent in 2004-05 from 7.98, the previous year. The reason pointed out for the reduction in gross NPAs as been writing off bad loans. Net NPAs was reduced to 1.35 per cent as on March 31, 2005 compared with 2.71 per cent the last year. |
| Chakrabarty said the key objective will be to grow the bank's core business so that it generates sufficient profits and increase its sustainability to absorb future business risks. |
| About the bank's plan to tap the equity market, Chakrabarty said the government must give its approval to a 'capital restructure' . It was earlier reported in the media that Indian Bank will be going in for an initial public offering in September. |
| "Only when the bank's present capital is restructured can it go for a IPO," he added. The bank had submitted a capital restructuring plan to the ministry of finance six to eight months ago. |
| The restructuring will entail wiping out accumulated losses of Rs 3,830 crore against a capital of Rs 4,594 crore. This will mean the bank will have a clean balance sheet of Rs 764 crore as capital. |
| When Indian Bank was reeling under huge accumulated losses a few years ago, the government rescued the bank from bankruptcy by pumping in Rs 3,820 crore of recapitalisation bonds in phases. |
| The bank expects to implement core banking solutions (CBS) provided by Tata Consultancy Service to 200 branches by the end of current fiscal. |
| "An estimated investment of Rs 50 lakh is planned per branch for the implementation of CBS and improve the infrastructure of the branches as technology is no longer a choice but has become a crucial factor to retain customers", he added. |