Exclusive | Indian Bank aiming for 20% growth in gold loans this year, says MD & CEO SL Jain

S L Jain - MD CEO of Indian Bank

Chennai-based Indian bank is aiming for 20 percent growth in its gold loan portfolio by the end of this year, MD &CEO Shanti Lal Jain told Moneycontrol in an exclusive interview on July 28.

“Currently we have a gold loan portfolio of Rs 64,000 crore, which comprises 15 percent of all segments. We are targeting between 18 to 20 percent growth in this portfolio by the end of this year,” said Jain.

Jain added that the bank was open to lending to airlines, if there were good opportunities. Also said Indian bank’s GNPA should be below 5 percent at the beginning of 2024.

Edited excerpts:

What is the target for your gold loan portfolio?

Currently we have a gold loan portfolio of Rs 64,000 crore, which is 15 percent of all our segments. We are targeting 18 to 20 percent growth in this portfolio by the end of this year.

Give us an update on writeoffs during the quarter.

In FY24, Rs 2,000 crore of loans were written off. But you see, here, continuous recovery is more than our slippage. So, when your recovery is more than your slippage, your gross and net NPA numbers will come down.

The chairman post has been vacant since 2018...

The chairman is appointed by the government of India. We have independent directors and full-time directors.

So, a number of committees are headed by independent directors. …our risk management committee is headed by an independent director or the IT strategy committee is headed by an independent director. So, day-to-day operations have absolutely no issues for us.

Are you open to lending to airlines?

We have very small exposure to airline companies. One is SpiceJet, but very low. On giving loans to airline companies, it depends from company to company. There are a lot of opportunities in the aviation sector.

You see, passenger traffic is increasing. So, it is always on a call based on the promoters, based on the leverage they have. Other than airlines you have scope for airports; even in handling systems there are several opportunities. So, wherever there are good opportunities, we are open to them.

Allahabad Bank has merged with Indian Bank effective 1st April 2020. What kind of experience have you had post-merger?

The amalgamation is successful  and revenue has increased. It has happened because of the synergy we are getting, because of the customers we are adding. Indian Bank and Allahabad Bank were on opposite sides of the country, which helped us to increase our pan-India presence.

Are you planning to join the RBI's CBDC initiatives?

We'll join the RBI's CBDC pilot project in the next round. We are talking to technology partners and all. So, we should be ready; there is no second thought about it.

In which segment are you looking for opportunities?

Last year, we grew RAM (Risk Assessment Model) by 13 percent and 12-13 percent in the corporate segment. This quarter also the same 12 or 13 percent.