Stabilising asset quality prime task: IOB chief

R Subramania Kumar moved to IOB on September 29 to avert a crisis as it would have become a leaderless organisation

Stabilising asset quality at the ailing Chennai-based lender Indian Overseas Bank (IOB) will be the top priority over the next few quarters, said the new Executive Director R Subramania Kumar.

Kumar was executive director at Indian Bank but moved to IOB on September 29 to avert a crisis as the latter would have become a leaderless organisation. Atul Agarwal, the only executive director at IOB, retired on Friday.

Kumar held discussions with senior managers on the stressed loan condition and the steps taken to control slippages. Besides managing asset quality, strengthening confidence of employees as human resource strategy would top his agenda, Kumar told Business Standard.

Chennai-based Indian Overseas Bank has remained headless for almost two months now in the absence of a full-time chief executive.

R Koteeswaran had retired as managing director and chief executive officer at the end of June 2016. He had joined Indian Overseas Bank on December 31, 2014.

The second line of leadership at IOB is thin. Pawan Kumar Bajaj, another executive director, has moved to Kolkata-based United Bank of India as managing director and chief executive.

Brickwork Ratings, meanwhile, had downgraded bonds issued by Indian Overseas Bank from A- to BBB+. It maintained its outlook on the bonds as negative. The downgrade has come in the context of rising bad loans on the bank´s balance sheet.