Indian Bank’s FCNR(B) inflows of Rs 19,000 Cr to partly replace bulk deposits, evaluating overseas branch expansion: MD Binod Kumar

Q. How much have you mobilised under FCNR(B) and what is your target? How much of bulk deposits can it replace?

Binod Kumar: We have already raised around USD 150 million. By September, my target is USD 2 billion. I already have a pipeline of USD 1 billion. CASA will always be there. Retail term deposits will always be there. If a good amount comes through FCNR(B), then some bulk deposits or high-cost CDs will come down.

USD 2 billion means almost Rs 19,000 crore. Part of that will offset bulk deposits and part of that will also go towards credit growth. Lending against these deposits will not happen in India. That lending will happen in overseas territories.

We have only two overseas branches - Singapore and GIFT City and seeing good traction from both the UAE and Singapore.

Q. There were concerns around UAE regulations affecting FCNR(B) mobilisation. Do you see any impact?

Binod Kumar: No. The UAE regulator has prohibited facilitation of documentation there. I don't have a branch in Dubai, so I wasn't going to do documentation there anyway. All my customers are ready to visit India.

The only restriction that may have an impact is if UAE banks stop giving dollar loans to Indian banks.

Q. Does this opportunity make you think of opening more overseas branches?

Binod Kumar: Yes, I have it in mind to open overseas branches.

We are looking at Malaysia, Indonesia, where Indian Bank has historical linkage, Dubai, and even South Africa. These are growing regions.

Branch opening is not a one or two-month phenomenon. It takes one to two years. We have not chalked out an exact timeline yet.

Q. What is your outlook on NIMs?

Binod Kumar: I think NIM will remain flattish. There is no trigger for it to go up or down. One or two basis points here or there may happen, but broadly it will remain around current levels.

This is based on the assumption that there is neither a rate cut nor a rate hike.

Q. Which loan segments will drive growth?

Binod Kumar: Retail and MSME continue to see good traction.

Agriculture was subdued this quarter at around 10%, but I expect agriculture, retail and MSME all to grow in the range of 15-16%.

Corporate credit is growing around 11%. We could have grown faster, but we do not want to compromise on NIMs. I would like to grow corporate credit around 10-11%. Our corporate pipeline is around Rs 53,000 crore.

Q. How are recoveries progressing?

Binod Kumar: We have already recovered around Rs 1,900 crore this quarter. One account contributed around Rs 400 crore, but recoveries are well balanced.

Accounts below Rs 1 crore contributed Rs 943 crore, while accounts above Rs 1 crore contributed Rs 942 crore. Smaller accounts themselves can contribute around Rs 1,000 crore every quarter.

Q. What is your view on RBI's proposal to compensate victims of digital fraud?

Binod Kumar: I welcome it. There may be some impact on profitability, but we are ready to accept that.

If we have to compensate customers, our own systems will become stronger because we will ask why the fraud happened and improve accordingly. Customer awareness will also remain important because fraud techniques keep evolving.

Q. Have you adopted MuleHunter.ai and ULI?

Binod Kumar: Yes, we have already adopted MuleHunter.ai. It helps identify repeat fraudsters across banks and strengthens mule account detection.

We have also onboarded ULI and have done cumulative business of around Rs 18,000 crore. Our Q1 target was Rs 2,000 crore and we achieved Rs 2,700 crore.

ULI improves ease of banking by enabling digital journeys, centralised data access, digital land verification and GST-linked lending.

Q. What remains your biggest priority going forward?

Binod Kumar: Resource raising. Credit growth is no longer the challenge. The challenge is raising deposits at a reasonable cost. CASA remains my top priority. If I have CASA, everything else follows automatically.