Indian Bank aims to recover Rs 5,500 crore from bad loans during FY27: MD B Kumar

Public sector lender Indian Bank is targeting up to Rs 5,500 crore from the recovery of bad loans during the current financial year. “The recovery made during the first quarter was Rs 1,885 crore, and the aim is to garner Rs 4,500 crore to Rs 5,500 crore under this head in FY27,” Indian Bank MD and CEO Binod Kumar told PTI in an interaction. Of this, the Chennai-based bank hopes to realise Rs 500 crore during the ongoing financial year from cases listed before NCLT.

Asked about the foreign currency deposit mobilisation drive started last month, he said the bank has collected $140 million till July 9.

“My plan is to raise around $2 billion in FCNR (B) deposits till September. It may seem high, but I already have a pipeline of $1 billion,” he said.

Indian Bank currently offers interest rates varying from 5.5-6.5 per cent on FCNR (B) deposits depending on tenure and amount. In a bid to attract foreign currency deposits by Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and Persons of Indian Origin (PIOs), the Reserve Bank of India last month withdrew, till September 30, interest rate ceiling on fresh Foreign Currency Non-Resident (Bank) deposits of 3-5 years’ maturity.

The move came at a time when FCNR(B) deposit inflows weakened sharply, with net inflows dropping to just $946 million in FY26 from $7.1 billion in FY25. The RBI had, in 2013, introduced similar schemes when dollar outflows were high, triggered by the taper tantrum. Speaking about low-cost deposit mobilisation efforts of the bank, Kumar said the bank has witnessed a robust 15.3 per cent growth in Current Account and Savings Account (CASA) deposits during the first quarter. It has increased to Rs 3,19,525 crore at the end of the first quarter from Rs 2,77,116 crore at the end of June 2025. So, in percentage terms, CASA rose to 39.73 per cent of the total deposits. The bank has taken several initiatives to augment CASA to 40 per cent of total deposits during this year, he said. The average balance in savings accounts has more than doubled to Rs 53,000 while the current account has also seen an improvement in average balance from Rs 1.36 lakh to Rs 1.90 lakh, he said.