India needs large, resilient banks to compete globally’

Bank of Baroda has set an ambitious target to grow its fee-based income from 7-8% to 11-12% of total income.In an interview with Mahesh Nayak, Debadatta Chand, MD & CEO, speaks about the bank’s strategy to scale up its corporate loan book, deepen retail, agri, MSME penetration, and outlines plans to list key subsidiaries. Excerpts:

- @ DEBADATTA CHAND, MD & CEO, BANK OF BARODA

What is the bank’s stance on mergers of public sector banks (PSBs)?

I view mergers as policy-driven decisions, and based on our experience, past mergers have been successful with a smooth integration processes. I don’t see integration as a challenge, especially given our institutional capabilities. India needs large, resilient banks to compete globally, and I am fully aligned with that vision of building scale and strength through strategic consolidation.

What’s driving the bank’s optimism for corporate loan growth in H2?

Our corporate loan book grew around 10-11% last year, and while Q1 and Q2 were relatively muted, we saw a sequential uptick of 8% in Q2. That momentum, combined with the traditionally strong Q3 and Q4, gives us confidence. We are seeing strong traction in sectors like renewables, data centres, and roads. Seasonal working capital demand also picks up in the latter half, especially post-festive season, which supports our outlook.

Are you seeing signs of private capex picking up?

Yes, to some extent. Capacity utilisation has reached levels where expansion becomes necessary. While many corporates are still using internal accruals or tapping bond markets, we expect stronger private capex demand in Q3 and Q4. If you include credit substitutes like investments in bonds, the overall credit environment is quite robust.

What’s the current pipeline for corporate sanctions and disbursements?