‘Won’t need more relaxation on NPA if things go as planned’

With the amalgamation of Kolkata-based Allahabad Bank with Chennai-based Indian Bank, the merged entity faces the task of sailing through tough times amid staff shortage.

PADMAJA CHUNDURU, MD and CEO of Indian Bank,

in an interview with Namrata Acharya, discusses the road map. Edited excerpts:

After merger, how will the first day look?

It is a new year for the bank. The government’s direct benefit transfer transactions will also take place. All products have been harmonised.

How will staff shortage impact these operations?

Only 50 per cent of the employees are working in offices. Given the disbursements that are due, we have requested those who can to attend to the branch, as the workload will be high. We are looking at some kind of scheduling for customers. In rural and semiurban areas, authorities are helping us.

When will the IT integration be complete?

We expect it to conclude in 6-9 months.

How does it look, in terms of numbers?

With this merger, Indian

Bank has doubled its size. We have over 6,000 branches and the total business is at ~8.5 trillion. The staff count has more than doubled, from 19,000 to 43,000. There’s no need to close any branch.

Allahabad Bank planned to monetise some land assets. What will be the strategy?

Allahabad Bank has some big real estate, especially in the north and east. They will be now used as either offices or training centres. Wherever we have offices that are leased, we will shift to these properties. We don’t see any hurry in selling. However, we will pursue whatever Allahabad Bank has put on sale.

What is the bank’s plan with its Universal Sompo stake, which Allahabad Bank wanted to monetise?

We will take it as a subsidiary. We need to have a detailed understanding of their business model. Indian Bank doesn’t have an insurance business, so we will take a call. At present, we will continue with the shareholding level of Allahabad Bank.

Do you see the need for more relaxations on the bad loan front, especially agriculture, as Allahabad Bank had high farm NPAS?

Depends on how fast things get resolved. If they go as planned, we won’t need further relaxation.

Are you planning any relaxation on onetime settlement schemes?

Yes, we are planning for those.

How will rate cut transmission take place?

Allahabad Bank didn’t have the need to do any rate cut; only Indian

Bank did. Now, the rate is applicable to the merged entity. We did a 75-bp rate cut on repo-linked loans.

We have reduced rates on both term deposits and to some extent on small amount savings accounts too.