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Informist, Thursday, Apr. 30, 2026

By Kabir Sharma

MUMBAI – Central Bank of India on Thursday said it had adequate capital buffer to support its growth plans as well as transition to the expected credit loss regime, even as the lender indicated it may tap markets to pare government shareholding.

Speaking at a post-earnings press conference, the bank's Managing Director and Chief Executive Officer Kalyan Kumar said its existing balance sheet strength is sufficient to absorb expected credit loss-related provisioning requirements and fund business expansion, ruling out any immediate need for capital raising specifically for the new framework.

However, the lender is open to reducing the government's stake—currently at 89.27%—through routes such as an offer for sale or qualified institutional placement, in line with minimum public shareholding norms. The management said it awaits direction and approval from the government, but is operationally prepared to access markets when required.  

On the business outlook, the bank guided for advances growth of 14–16% in 2026-27 (Apr-Mar), broadly in line with its medium-term strategy, while deposits are expected to grow at a relatively slower pace of 10–12%. The lender also aims to maintain a current account savings account ratio of around 48% by the end of FY27, reflecting a focus on improving funding mix.  

The management indicated that net interest margin is expected to remain above 3% in FY27, supported by gradual repricing of liabilities. The bank said deposit repricing is largely underway and should be completed by the next quarter, which is expected to ease cost pressures and support margins going forward.

On asset quality, the bank expects gross non-performing assets to remain below 2.5% in FY27, with continued recovery momentum. It has guided for recoveries of around INR 3.5 billion during the year, driven by both technical write-off accounts and existing non-performing assets.

The lender also outlined plans to improve operational efficiency, targeting a reduction in cost-to-income ratio by 100–150 basis points annually. This will be driven by higher income generation, tighter control on operating expenses, and increased focus on fee-based businesses and recoveries.

On the corporate lending front, the bank said it has a pipeline of around INR 60 billion in sanctioned but undisbursed loans, indicating steady traction in credit demand from corporates. Addressing concerns around geopolitical risks, particularly in West Asia, the bank said its exposure to the region stands around INR 7.08 billion and remains manageable. It added that there has been no visible stress in asset quality linked to the region so far, with no requests for restructuring or support from borrowers.

Importantly, the bank noted that remittance flows from West Asia—a key source of inflows for Indian banks—have not seen any significant disruption despite ongoing uncertainties. Salary remittances continue to remain stable, with only discretionary spending such as tourism witnessing some moderation.  End

Edited by Deepshikha Bhardwaj

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