GoI issues notification swapping Indian Bank chief with that of IDBI Bank

Decision comes at a time when IDBI Bank has been suffering due to increase in NPAs

The Government of India has notified the swapping of IDBI Bank Ltd Managing Director & Chief Executive Officer Kishor Piraji Kharat with Indian Bank Managing Director & Chief Executive Officer Mahesh Kumar Jain. The notification comes at a time when IDBI Bank, a pioneering instution in the financial sector, has been suffering due to increase in NPAs among other issues.

According to a regulatory filing by Indian Bank, the government, through a notification dated March 18, 2017, appointed the MD & CEO of IDBI Bank Limited, Kishor Piraji Kharat, as MD & CEO of Indian Bank, "for the remaining period of his current tenure or until further orders, whichever is earlier".

Further, through a communication on the same day, the government has appointed the present MD & CEO of Indian Bank, Mahesh Kumar Jain as MD & CEO of IDBI Bank Limited. The above appointment will be effective from the date of assumption of charge of the post by Kishor Piraji Kharat, as the position of MD & CEO being a whole time position.

Jain was not available for a comment.

The 54-year-old Jain assumed charge as the MD and CEO of Indian Bank on November 2015. He was holding additional charge as MD & CEO from June 10, 2015. The Bank has showed improvement in various parameters including the net profit and Return on Assets during his tenure.

The net profit of the Indian Bank has grown from Rs 42.3 crore during the quarter ended December 31, 2015 to Rs 373.48 crore during the quarter ended December 31, 2016. The total income increased from Rs 4,444.58 crore during the quarter ended December, 2015 to Rs 4557.25 crore during the quarter ended December, 2016.

The Return on Assets has jumped from 0.08 during the quarter ended December, 2015 to 0.71 during the corresponding quarter, this fiscal year.

The gross NPA has grown to Rs 9675 crore by the end of December, 2016, which was 7.69 per cent of the gross advances, as against Rs 7,071 crore (5.61 per cent) during the same quarter of previous fiscal year. The net NPA also grew to Rs 5,798 crore (4.76 per cent) from Rs 3881 (3.17 per cent) during the period.

Kharat, who has been the executive director of Union Bank of India, took charge as MD and CEO of IDBI Bank on August, 2015. The net profit of the Bank has declined by three per cent to Rs 2,255 crore during the quarter ended December 2016, as compared to Rs 2184 crore during the same quarter of previous year.

The total income declined to Rs 7,104.21 crore during quarter ended December, 2016, as against Rs 7,361.86 crore during the same quarter of the previous year. The return on assets stood at a negative 2.32 per cent, as against a negative 2.63 per cent during the same quarter last year.

The gross NPA has increased to Rs 35,245.33 crore (15.16 per cent) during the quarter, as compared to Rs 19,615.22 crore (8.94 per cent) during the corresponding quarter of last year. The net NPA grew to Rs 20,949.11 crore (9.61 per cent) from Rs 9612.80 crore (4.60 per cent) during the same quarter of last year.

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