Indian Bank focuses on farm, SME sectors

Chennai-based Indian Bank is focussing on agriculture, small and medium enterprises (SME), retail and education sectors for growth.

Agriculture, SME, retail and education sectors account for a major chunk of the bank's portfolio. These sectors are expected to contribute to the margin of the bank, Indian Bank chairman and managing director Dr K C Chakraborty said.

Agriculture presently contributed around 4 per cent to the margin of the bank, Chakraborty said.

"The Bank had covered one million self-help group members as part of its agri-lending programme. In terms of education loan, the bank extended credit to 50,000 people, registering 90 per cent growth. SME credit has also grown by 33 per cent last year," Chakraborty said.

The bank expects to hit the market with its IPO issue by January end or the beginning of February.

The IPO of 8,59,50,000 equity shares will reduce the government's holding to 80 per cent from the current 100 per cent.

The bank would take the core banking solution (CBS) to 1000 branches from its 750 branches by the end of the current year, Chakraborty said.

The bank, with Rs 63000 crore business, expects the growth to be in the region of 16 to 17 per cent.

Admitting that the norms of AS 15 would adversely affect the bank, Chakraborty said: "The impact of AS 15 norms will be assessed following the public issue," he said.

Indian Bank expects its strategic alliance with Oriental Bank of Commerce and Corporation Bank to help it in creating synergies in IT resources and treasury resources, building e-payment systems, bancassurance, forming business syndicates, sharing training resources, accessing the capital market and other financial ventures.

"There is no scope of consolidation in the market since major part of the people in the country does not have a bank account. Only alliances can help in the growth of the banks," he added.