After huge loss IDBI bank to shift focus from Corporate to retail for turnaround: Dy Managing Director Yadwadkar in Gujarat

Ahmedabad: Public sector IDBI bank, which suffered a whopping loss of Rs 5158 crores last fiscal mainly owing to bad corporate sector loans and now faces several restrictions including that on branch expansion and capital expenditure from the RBI under it prompt corrective action scheme, has launched an aggressive turnaround strategy with a focus on building a robust retail portfolio, enhancing capital base and strengthening customer relationship, Deputy Managing Director of the bank G M Yadwadkar today said.

Addressing a press conference here Yadwadkar held the bad loans to corporate sectors mainly responsible for the loss to the bank. “Recovery of bad loans and prevention of further slippages will be a priority area for the bank in the short term. Given the stress in the corporate sector, the bank will restrict growth in the corporate loan book and focus on increasing retail and priority sector asset base. This will help the bank to reduce risk weighted assets and improve CAR in the short term. Also, the bank will look at reducing its operational cost and sell non-core assets over a period of time,” he said adding that the total NPA was around Rs 44500 crores of which most was in corporate portfolio.

He said that though the RBI has put some restriction under prompt corrective action but it has not restricted the bank in its day to day operation in any manner.
The Dy MD said that though the government has taken many good steps for the revival of the economy but it would take time to yield desired results. Various sectors including Telecom,Steel and Infrastructure remained under stress last fiscal which resulted in NPA’s in our corporate loan portfolio leading to loss.

“While the year 2016–17 posed challenges, the bank’s major thrust will be on re-balancing the business portfolio in coming months. The bank will tap emerging opportunity to grow its business, with a focus on propelling notably the retail and priority sector book. The Bank has crafted a comprehensive turnaround strategy to get back on the path of growth. Accordingly, our focus will be on increasing our retail footprint, further enhance our lending in priority sector, aggressively seek recovery of NPAs and take all possible steps for augmenting our capital base,” he said.

In fact, the bank has made headway as evidenced in the rising share of retail advances to 43% as at end-March 2017 from 33% as at end-March 2016. The Bank’s CASA deposits as well as Retail Term Deposits both grew by over 22% during the year. Also, the share of CASA deposits and Retail Term Deposits increased to over 31% and 32%, respectively, during the year. Reimagining the customer experience in an increasingly digital world is another key area. The Bank introduced innovations such as UPI App ‘PayWiz’, Social Media banking ‘Facebook – iEngage’ for retail internet banking customers and digital passbook ‘mPassbook’ on Android platform, he said.

On the occasion he also shared details about the bank’s position in Gujarat.

At present IDBI Bank has a network of 110 retail branches, 4 Retails Assets Centres, 7 Trade Finance Centres, 1 Currency Chest and 217 ATMS in the state of Gujarat and Dadara Nagar Haveli and Daman & Diu. In addition, It has 4 Specialized Corporate branches. The branch network has been further augmented with the appointments of Business Correspondents (BCs) where it has no presence. IDBI Bank has total deposits of Rs.11246 crore and total advances of Rs.10116 crore for the state of Gujarat as on March 31, 2017. Bank is aggressively contributing to various Govt. Schemes viz. PMJDY, PMMY, Stand Up India and Social Security Schemes, he said.

DeshGujarat