What is your overall outlook for FY27 in terms of credit growth? Do you see any slowdown?
We are guiding for credit growth of around 9-11 per cent, and I don’t see a broad-based slowdown. While a few sectors may face headwinds, others will have tailwinds. Our strength lies in the retail,agriculture, micro, small and medium enterprises or MSME (RAM) segment, and I expect that momentum to continue. In the corporate space, sectors such as green finance, electric vehicles (EVs), batteries, power, transmission, and data centres should see strong activity. Overall, I expect the growth momentum to sustain.
Deposits, especially current account, savings account (Casa), have been challenging. How do you see this evolving?
The pressure on deposits will continue. Casa is undergoing a structural shift as customers move from being savers to investors, and this trend will persist with rising financial literacy. Additionally, the government’s push towards the just-in-time system is also impacting deposit flows. We are tapping alternative funding sources. For instance, we raised infrastructure bonds in March at 7.15 per cent for 10 years. So,while deposits remain a challenge, we have other avenues to support growth.
What is your outlook on margins for FY27?
I would not say margins have bottomed out yet. While the rate cut cycle may be nearing its end, funding costs remain elevated, making it difficult to sustain margins. Our net interest margin (NIM) for Q4 was about 3.23 per cent,and we are guiding for around 3.13 per cent in FY27, with only a moderate impact expected. On efficiency, our cost-to-income ratio was around 46 per cent for FY26, and we are targeting to bring it down below 45 per cent in FY27. The earlier elevation was due to a mix of factors rather than any single issue.
The Reserve Bank of India(RBI) has been increasingly focused on IT risks, especially with rising digital fraud. What steps is the bank taking to manage vendor risk and build internal capabilities?
We will continue to rely on vendors to an extent, as building everything in-house is not always feasible due to capability and resource constraints. Even where capability exists, attracting top talent can be challenging. So, vendor risk is inevitable, and the focus is on managing it effectively. We have robust, board-approved policies covering vendor onboarding, performance, and security. We actively engage with vendors to review their practices and remain highly conscious of outsourcing risks. We also consult industry experts regularly. At the governance level, we have an industry specialist on board and are in the process of adding another expert to the IT strategy committee. We have also on boarded an external advisor. These steps will strengthen our oversight and help mitigate vendor and cyber risks.
 "Binod Kumar, Managing Director and Chief Executive Officer, Indian Bank")