T M Bhasin, took over as chairman and managing director, Indian Bank on April

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1. Prior to this, he was executive director, United Bank of India. In an interview Bhasin told Sarbajeet K. Sen that he would target a 20 per cent increase in the bank’s business during the present financial year. Bhasin also said that his aim was to give a more pan-India flavour to the Chennai-headquartered bank.

Excerpts:

How would you describe your stint at United Bank of India?

It was very satisfying. I joined the bank as executive director in November 2007 and left on March 31, 2010. When I took charge of the bank, the total business was around Rs 58,000 crore. It reached Rs 1,15,000 crore as on March 31, 2010. When I had joined United Bank was a zero-technology bank. We were able to make it 100 per cent CBS (core banking solution) of all 1,532 branches within a span of two years. The high point, of course, was the bank’s IPO (initial public offering), which came out in March 2010, days before I left that bank. It was a successful issue.

What are your business projections for Indian Bank?

As on March 31, 2010, Indian Bank has crossed Rs 1,51,000 crore mark in total business, comprising Rs 1,45,000 crore Indian business and Rs 6,000 crore global business through our two overseas branches in Singapore and Colombo. The Singapore branch gave us business of Rs 5,800 crore, whereas the Colombo branch was at Rs 200 crore at the end of the previous financial year. For the present year, we plan to take the total global business to Rs 1,83,000 crore, out of which Indian business will be Rs 1,75,000 crore and global Rs 8,000 crore. This would be a growth of around 20 per cent, which would be slightly better than the industry expectation of 16-18 per cent.

What would be the focus sectors for the bank?

Our first focus will be to lend to the agriculture sector. We feel that there is need to lend to farmers to make them free from the moneylender’s clutch. Farm loan rates in any case are favourable and there is also interest subvention by the government. Our second, focus area will be the medium, small and micro enterprises (MSME) because we see a lot of scope in augmenting our business and take advantage of various government schemes. Then we have retail loans, including housing, personal and car loans and finally, we will lay emphasis on the infrastructure sector.

You have put agriculture as your top priority. Do you see good business sense in lending to the sector?

We have linked the gold loan scheme with the crop loan so there is double security available to the bank.

How does that work?

Lots of people in the South pledge gold to borrow from banks. Also, when they take loans for agriculture, the land is pledged with the bank. With both these things taken together, the security cover is adequate for the bank. The borrower also has the confidence that his requirement will be met and he doesn’t need to go to the moneylender.

Where do you see retail lending rates heading?

We have to wait and see what the RBI (Reserve Bank of India) comes up in its money policy later this month.

What are you expecting in the credit policy?

The monetary policy is likely to focus on inflation control and inclusive growth. I feel that the third priority would be to augment exports.

What is the branch expansion plan of your bank?

Within India, we have 1,754 branches. Our major presence is in Tamil Nadu, where we have 757 branches and Andhra Pradesh with 230 branches. Rest of it is more or less evenly distributed across the country. Our plan it to open 190 more branches in 2010-11 and 250 in 2011-12, taking the total to 2,200 branches.

In which region will these new branches be opened?

Mostly in the North and West and some will be in the East also. That will give our bank a more pan-India flavour.

What about overseas expansion?

We had a branch in Jaffna (Sri Lanka) earlier that was closed due to the troubles in the region. Now that the situation has improved; the Sri Lankan government has requested us to reopen the branch. We are looking at it. We are also looking at other centres in Sri Lanka and the Maldives.

What is your plan for the bank’s subsidiaries?

We have three subsidiaries – IndBank Housing, IndFund Management and Indbank Merchant Banking. The board will soon take a view on the working on all the subsidiaries.

sarbajeetsen@mydigitalfc.com