Focus areas will be retail penetration, MSMEs: Indian Bank's Binod Kumar

Binod Kumar lines up the strategy to focus more on retail and micro, small, and medium enterprises, plans to improve technology via an investment of Rs 1,300 crore, and outlines the growth roadmap

Binod Kumar took charge as managing director and chief executive officer of Chennai-based Indian Bank early this year. In an exclusive interview with Shine Jacob, he outlines the strategy to focus more on retail and micro, small, and medium enterprises (MSMEs), plans to improve technology via an investment of ₹1,300 crore, and gives the growth road map. Edited excerpts:

 

What is your growth outlook for 2025-26 (FY26)?

 

On deposits, I am expecting a growth rate of 8-10 per cent this financial year. On advances, it will be 10-12 per cent, and we are giving a CASA (current accounts and savings accounts) guidance of 40 per cent. On gross NPAs (non-performing assets) and net NPAs (NNPAs), we have healthy numbers. On gross NPAs, we may be around less than 3 per cent, and we will maintain the current level of less than 1 per cent for NNPAs too. On the provision coverage ratio too, we have good numbers and on RoA (return on assets), we are at 1.32 per cent, and I am giving a guidance of 1.2 per cent. I expect the NIM (net interest margin) to be 3.15-3.30 per cent. We will be able to achieve good profit. 

 

What are your priorities, having taken charge recently?

 

We have three to four strategies. At present, we are in the range of 64.23 per cent on RAM (retail, agriculture, and MSMEs), and we will maintain it at almost the same level -- around 65 per cent. In RAM, my focus areas will be retail and MSMEs. In MSMEs, our growth was seen at around 12 per cent in FY25 as against around 5 per cent before. The share of MSMEs on the books is 17 per cent, and I would like to take it to 20 per cent over two to three years. The retail share is around 22 per cent now, and my target is to take it to 25 per cent over three years.

 

CASA is a concern. For that also, we have started 100 Resource Acquisition Centres (RACs) and 18 Resources and Government Relations (R&GR) centres. They have been able to garner good resources — R&GR centres have been able to raise around ₹28,000 crore, and RACs around ₹17,000 crore.

 

Are you looking at branch expansion and improving technology too?

 

In the past two to three years, we have invested a lot in digital capacity. We are putting in around ₹1,300 crore in information technology. We are also focusing on salary accounts by entering into 13 agreements, opening around 45,000 accounts.

 

Every new branch gives me a business of ₹20-25 crore. We are looking at states such as Gujarat, Maharashtra, Rajasthan, and Madhya Pradesh. It will also be one of the focus areas. Most important for us will be customer service and operational efficiency digitally. We have placed an order for a next-gen call centre, so that customer grievance is addressed at the first point of contact. We are about to launch a generative-AI-based chatbot soon.

 

On digital lending, we have been able to garner ₹1.67 trillion in FY25. Our outstanding in digital lending is around ₹2.59 trillion. We would like to have more penetration in retail, and we are already doing well in agriculture and MSMEs.

 

How are you looking at the Reserve Bank of India’s measures on gold loans?

 

We are assessing the impact. Many of the changes have been addressed by us. The moves are for improving the system and maintaining a level playing field.

 

On the corporate side, which are the areas you will be betting big on, with infrastructure spending expected to pick up?

 

I would like to maintain corporate share at around 35 per cent, and RAM at 65 per cent. Infrastructure is one area we are looking at. Last year, government expenditure during the first quarter in this segment was not much, and this year, it will be there throughout the year. We are aggressive on renewables now, especially solar energy and panel manufacturing. Roads, ports, and electric vehicles are also picking up.

 

What were the major drivers of your growth during the last quarter?

 

On all the parameters like asset quality, return on assets, and return on equity, the bank has had a stellar performance. Growth has not been up to my expectations or the guidance we had given, but that was a conscious call. On deposits, we have grown by 7 per cent against a guidance of 8-10 per cent. We have raised infrastructure bonds of around ₹10,000 crore and also taken some refinance, which is cost-effective. That is why we did not go for deposits also. We have not raised any bulk wholesale deposits, and they have remained at ₹1.04 trillion. Since we are getting funds through infrastructure bonds or refinance, this conscious call was taken.

 

On credit, we have shed some ₹10,000-12,000 crore of low-yielding advances on the corporate side. That is why growth here is only 3 per cent.