 "IDBI to firm up three-year business plan to raise capital")
Public sector lender IDBI Bank is set to decide on a road map for the three years ending March 2019, as well as firm up capital-raising plans.
Currently, the bank’s capital adequacy levels are comfortable. While it needed capital for growth, this would be raised keeping in mind the credit growth and market conditions, said K P Kharat, the bank’s newly appointed managing director and chief executive. He, however, did not elaborate on a timeline for finalising business plans.
In June this year, the bank’s capital adequacy ratio was 11.74 per cent under Basel-III norms. The government has decided to infuse Rs 2,229 crore in IDBI Bank by subscribing to shares through preferential allotment. As of June, the Centre’s stake in the bank stood at 76.5 per cent.
Soon after taking charge, Kharat, in a communication to employees, said he wanted the bank to emerge as a dominant player in the banking segment. For that, the bank would need greater clarity of purpose and prioritise strategies to increase efficiency, he added.
It would also have to realign business portfolios after a systematic analysis, he said.
On pressure on asset quality, the IDBI Bank chief said though many units financed by the bank were operational, they were facing cash-flow problems. These, he said, had been categorised as non-performing assets (NPAs), in line with regulatory norms. These accounts would be upgraded when the situation improved, he said, adding the bank wouldn’t sell NPAs from its portfolio.
In June, the bank’s gross NPAs rose to 6.64 per cent (Rs 14,112 crore) from 5.64 per cent (Rs 10,763 crore). In March, they stood at 5.88 per cent (Rs 12,684 crore).
Currently, the bank’s capital adequacy levels are comfortable. While it needed capital for growth, this would be raised keeping in mind the credit growth and market conditions, said K P Kharat, the bank’s newly appointed managing director and chief executive. He, however, did not elaborate on a timeline for finalising business plans.
In June this year, the bank’s capital adequacy ratio was 11.74 per cent under Basel-III norms. The government has decided to infuse Rs 2,229 crore in IDBI Bank by subscribing to shares through preferential allotment. As of June, the Centre’s stake in the bank stood at 76.5 per cent.
Soon after taking charge, Kharat, in a communication to employees, said he wanted the bank to emerge as a dominant player in the banking segment. For that, the bank would need greater clarity of purpose and prioritise strategies to increase efficiency, he added.
It would also have to realign business portfolios after a systematic analysis, he said.
On pressure on asset quality, the IDBI Bank chief said though many units financed by the bank were operational, they were facing cash-flow problems. These, he said, had been categorised as non-performing assets (NPAs), in line with regulatory norms. These accounts would be upgraded when the situation improved, he said, adding the bank wouldn’t sell NPAs from its portfolio.
In June, the bank’s gross NPAs rose to 6.64 per cent (Rs 14,112 crore) from 5.64 per cent (Rs 10,763 crore). In March, they stood at 5.88 per cent (Rs 12,684 crore).