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Informist, Friday, Jul. 10, 2026

 

--Indian Bank: Expect to maintain CASA at current level going forward 

--Indian Bank: Aim to raise around $2 billion of FCNR (B) deposits 

--Indian Bank: Competition from peers in bulk deposits has cooled 

--Indian Bank: Big banks have to take lead in cutting rates on loans 

--Indian Bank: Market competitive on home, corporate loans front 

--Indian Bank: Don't see any large profit from treasury income in Jul-Sept 

--Indian Bank: Don't expect 10-yr G-sec yld to fall below 6.65% anytime soon 

--Indian Bank: Will use inflows into FCNR(B) deposits for domestic loans

 

By Kabir Sharma and Vaishali Tyagi 

 

MUMBAI/NEW DELHI – Indian Bank aims to mobilise $1.5 billion-$2.0 billion through foreign currency non-resident (bank) deposits and external commercial borrowings, with the lender planning to use the inflows to support domestic credit growth, Managing Director and Chief Executive Officer Binod Kumar said in a call with analysts after announcing the bank's Apr-Jun earnings.

 

The state-owned lender has already mobilised around $150 mln under the Reserve Bank of India's special FCNR(B) deposit window and has a pipeline of nearly $1 billion, Kumar said. "We have so far raised around $150 million...and going forward I have given estimates that I will be able to raise between $1.5 billion to $2 billion," he said. "Challenge is not in raising FCNR...challenge is in the funding...but we are managing and quite hopeful."

 

Kumar said the bank expects liquidity of nearly INR 180 billion from FCNR(B) deposits and external commercial borrowings, which can be comfortably deployed in the domestic loan book. "The domestic credit demand is robust. So we can easily deploy this amount in our domestic credit space," he said, adding that the cost of these deposits would not materially reduce the bank's funding cost as it estimates the cost of FCNR(B) deposits at around 6.5%. 

 

Despite the expected liquidity infusion, Kumar does not expect the benchmark 10-year government bond yield to decline sharply. "I think this is fine if Bloomberg inclusion happens, maybe it may go down to 6.65%, otherwise below that I don't see it pulling down," he said, adding that treasury gains are unlikely to provide meaningful support to earnings in the Jul-Sept quarter. 

 

On liabilities, Kumar said Indian Bank expects to maintain its current account savings account ratio despite industry-wide competition for deposits. The bank's CASA ratio stood at 39.73% at the end of June and Kumar reiterated his confidence in sustaining the level. "CASA is still a challenge, but I expect with the support of all the staff...that we will be maintaining that," he said, highlighting improved participation by branches in deposit mobilisation.

 

The lender also indicated that competition for bulk deposits has eased in recent weeks. Referring to wholesale funding, he said that competition "has cooled down", helping the bank avoid paying elevated rates on bulk deposits. However, pricing pressure remains intense on the lending side.

 

"There is lot of competition still...home loan, corporate loan, particularly in good rated account," Kumar said. While competition remains fierce, he noted that loan rates have not fallen further because "housing will be 7.15%, 7.20%, nobody is taking lead to reduce it. Some big banks only will have to start." 

 

Earlier in the day, the bank detailed its June quarter earnings and reported over 10% on-year growth in its net profit at INR 32.73 billion. The bank reported its earnings during market hours, following which its shares surged over 10% to INR 872.45 on the National Stock Exchange. Shares of the bank ended at INR 870.70 on the NSE, up 9.8% from the previous close.  End

 

US$1 = INR 95.33

 

Edited by Avishek Dutta

 

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