Indian Bank Aims ₹6,500-Cr Recovery in FY26

Indian Bank crossed the annual net profit milestone of ₹10,000 crore for the first time in FY25. In an interaction with Narayanan V, managing director and CEO Binod Kumar discusses the credit and deposit growth plans for the current fiscal, the guidance for net interest margin (NIM) and recovery strategy. Excerpts:

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Indian Bank crossed the annual net profit milestone of ₹10,000 crore for the first time in FY25. In an interaction with Narayanan V, managing director and CEO Binod Kumar discusses the credit and deposit growth plans for the current fiscal, the guidance for net interest margin (NIM) and recovery strategy. Excerpts:

What's your NIM guidance for FY26?

The domestic NIM declined sequentially to 3.48% for the March quarter from 3.57%. On an annual basis, it dropped to 3.51% from 3.54% in FY24. I believe there will be further pressure on NIMs as deposit rates remain elevated. Even after a 50-basis-point repo rate cut, only two-three banks have reduced peak deposit rates. So, most deposit accretion is still happening at rates of around 7.25-7.30%, which continues to put pressure on the cost of deposits.

With more rate cuts being expected, NIMs will likely moderate. That's why I've revised our FY26 NIM guidance to 3.15-3.20%. However, NIM should improve once the gap between current account, savings account (CASA) and fixed deposit rates narrows. Then, the cost of deposits will also start easing.

What are your fundraising plans for FY26?