Driving Growth With Strong Financial Discipline

Sunil Jain
GM & CFO - Indian Bank  [EasyDNNnews:PaidContentStart]

What are the bank’s credit and deposit growth targets for FY27, and which segments are expected to drive this growth? 

Our Bank is targeting overall credit growth of around 13 per cent and overall deposit growth of around 11 per cent for FY27. We are adopting a strategy of balanced growth to keep the gap between deposit and credit growth range-bound to avoid any negative impact on overall profitability and Net Interest Margin (NIM) of our Bank. On the deposit side, a major strategic focus is on mobilisation of CASA and FCNR(B) deposits. 

Credit growth is expected to be primarily driven by RAM (Retail, Agriculture, and MSME) segments, which constitute 66 per cent of Gross Domestic Advances and are expected to grow by approx. 15 per cent to 16 per cent. 

Within the corporate lending space, the bank is seeing credit demand in specific sectors such as green finance (including EVs, Solar panel manufacturing, and solar power plants), data centres, transmission lines, and Logistics/warehouse development, etc. 

What measures is the bank taking to improve deposit mobilisation and further strengthen its CASA ratio? 

strengthen its CASA ratio? The bank is hopeful of maintaining its CASA ratio around 40 per cent. To achieve this and counter broader pressure on deposit growth, the bank has implemented several strategic measures, viz.: 

plemented several strategic measures, viz.:

• Providing fintech solutions for institutions
• Premium product launches
• Focus on salary accounts and POS expansion
• Providing virtual banking through the offering of our VBX platform
• Providing cash management services to capture institutional liquidity and streamline corporate cash flow 
   

What is management’s outlook for Net Interest Margin in FY27, considering the expected movement in lending yields and deposit costs? 

Net Interest Margin (NIM) remains a key focus area for the Bank, and we are expecting NIM to be around 3.25 per cent. Considering the present interest rate scenario, we do not expect any major compression or expansion in margins. 

What is management’s outlook for slippages, credit costs, recoveries, and upgrades in FY27? 

Recoveries and Upgrades : The bank has set an overall recovery target of ₹4,500 crore to ₹5,500 crore for FY27. Within this target, we expect to recover ₹500 crore from NCLT resolutions, ₹1,200 crore to ₹1,500 crore from Accounts Under Collection (AUC/written-off accounts), and ₹200 crore from Asset ReConstruction Companies (ARCs). The Bank is on track to achieve these goals, having already recovered ₹1,885 crore during the first quarter (Q1) itself. This recovery includes AUC recovery of ₹751 crore and recovery from NCLT of ₹254 crore. 

Slippages: We are hopeful of maintaining a slippage ratio of less than 1 per cent throughout FY27. The Bank's asset quality continues to improve, with the slippage ratio declining to 0.77 per cent in Q1 from 0.96 per cent in March 2026. Furthermore, the total Special Mention Accounts (SMA) ratio for accounts of ₹5 crore and above has significantly declined year-on year, from 0.99 per cent to 0.26 per cent. 

Credit Costs: Our guidance for overall credit costs in FY27 remains below 1 per cent. In Q1 FY27, the Bank reported a credit cost of 0.23 per cent, reflecting a significant improvement from 0.47 per cent in Q4 FY26. Additionally, in Q1 FY27, the Bank made a provision of ₹1,000 crore towards the anticipated impact of Expected Credit Loss (ECL). 

How does the bank plan to expand its digital capabilities and leverage these initiatives to improve customer acquisition, operating efficiency, and fee-based income? 

• Expanding Digital Capabilities for Acquisition, Efficiency, and Fee Income: Presently, the Bank has about 2.5 crore digitally active customers and generated business of ₹67,327 crore through digital banking channels during Q1 FY2026–27, registering a 16 per cent year-on-year growth. The Bank is also investing in digital transformation to drive growth across multiple fronts. At present, the bank has 158 digital journeys, utilities, and processes enhancing customer convenience and operational efficiency.
• Customer Acquisition and Efficiency: We have launched a Customer Relationship Management (CRM) platform aimed at centralising customer data through effective lead, campaign, sales, and service management. We have also launched the Virtual Banking Experience (VBX) platform to provide customers with personalised, digital-first banking services without requiring branch visits. For businesses, the Bank offers the Ind Smart Biz MSME App, QR code, POS machines, etc.
• AI Integration: The bank is leveraging AI through tools like 'SLICE' (SME Lending Integrated Credit Engine), which uses digital public infrastructure (GST, ITR) and alternative data to underwrite MSME loans faster and more accurately. We have also deployed AI in collections, which has directly contributed to reducing our SMA portfolio.
• Fee-Based Income: These operational efficiencies and digital credit delivery mechanisms have directly boosted our non-interest income. The bank surpassed its 15 per cent growth target in fee based income, achieving an impressive 17 per cent year-on-year fee income growth in Q1, primarily driven by a surge in loan processing fees by 58 per cent, cross-selling by 33 per cent, and LC/BG commissions by 9 per cent, and income from syndication charges. 
   

How do you feel about being recognised as the Best CFO in the Banking Sector for a second consecutive year? 

Receiving this recognition for a second consecutive year is deeply gratifying, but above all, it stands as a testament to the collective dedication, resilience, and operational excellence of the entire Indian Bank team. Under the visionary leadership of our MD and CEO and Executive Directors, we have consistently focused on strengthening our balance sheet, optimising financial performance, and elevating our customer value proposition. This honour underscores our shared commitment to driving sustainable, long-term growth and maintaining strategic financial discipline.

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