Chennai, July 9 (IANS) Going for one-time settlement of non-performing loan accounts, focusing on auctioning seized mortgaged properties, increasing net interest income and net interest margin, and going after education loan defaulters are some of the focus areas for Indian Overseas Bank (IOB) to be back in black this year, its MD &CEO Karnam Sekar said on Tuesday.
He also said the bank, while looking at increasing current account and saving account (CASA) deposits, will also look at reducing costs and has asked Rs.6,000 crore from the Central government as capital.
“We hope to come out of the prompt corrective action (PCA) framework this year. The second quarter of this fiscal, we expect to turn profitable. Our non-performing assets (NPAs) are coming down. We need to recover loans from big accounts. That will be our focus,” Sekar told media.
“Next two quarters, we are hoping for good numbers. We are looking at one time settlement of big accounts. The haircut (the amount to be foregone) will be as per the formula,” he added.
According to Sekar, the IOB was biased towards corporate sector for the past three/four years and this will be changed with greater focus on retail, jewel loans and others.
“The ideal ratio of corporate: retail should be 50:50,” he said.
Agreeing that the bank did not focus on auctioning of mortgaged assets that were seized for non-payment of dues, he said that the bank will focus on that area now.
Sekar said the concept of making profit is being spread across the bank.
About the education loan portfolio, he said the delinquency is on the high side and the bank will try many methods to recover the education loan dues.
“The bank will look at the options of recovering the dues by contacting employers of the borrowers or even putting out their details on the social media,” he said.
Sekar said the bank will also look at the option of extending the education loan repayment period.
There has been demand for restructuring the education loan like the loans to the corporate sector. Like the corporates which are affected when the economy is not doing well, the education loan borrowers would also get impacted by not getting jobs.
Sekar said there are defaults in education loan portfolio due to genuine reasons and also willful defaulters.
“We will go after them. In education loans, you need to find where the borrowers are, where they are employed,” he said.