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IDBI Bank’s newly-appointed Managing Director and CEO, Kishor Kharat, is firming up a road map for the next three years ending March 2019.
The bank’s board is expected to meet this week to finalise its future strategy.
Soon after taking charge of the new assignment, Kharat in his communication to his employees had said that he wants the lender to emerge as one of the dominant players in the banking domain.
“For this, the bank would need greater clarity of purpose. It would also have to prioritise strategies to increase the bank’s efficiency,” he said.
For starters, the bank does not plan to sell any of its bad loans yet.
“Many units that are financed by IDBI Bank are operational but are facing cash flow problems. They have been categorised as non-performing assets (NPAs) in line with regulatory norms. These accounts would be upgraded when the situation improves. IDBI would not sell NPAs from its portfolio,” Kharat said on the sidelines of the IBA-FICCI Banking conclave.
‘Low rates’ He added that at this juncture, it is not thinking of going to asset reconstruction companies (ARCs) because the ARC market is not very attractive and also because of the low rates being offered in the market.
The public sector bank’s gross NPAs in the June quarter this year rose to 6.64 per cent (₹14,112 crore), up from 5.64 per cent (₹10,763 crore) a year ago. Sequentially too, the gross NPAs increased from 5.88 per cent (₹12,684 crore) in March 2015.
“Project finance is a definite strength inherited from the erstwhile Development Finance Institution avatar. Being a commercial bank, there needs to be a realignment of business portfolios after systematic analysis,” he added.
Similarly, Usha Ananthasubramanian, the new CEO and MD of Punjab National Bank, which also saw a significant spike in bad loans, does not intend to sell them.
“There are traditional methods of attacking bad loans… we need to get a bit more innovative.
“We’re looking at the new dispensations and methodologies allowed to us. We need to have a look at new ways of approach while dealing with NPAs,” she told reporters.
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