The bank has not shortlisted any partner yet and will evaluate potential tieups based on valuation, due diligence and regulatory requirements.
“In terms of assets and balance sheet, including State Bank of India, Indian Bank is the seventh-largest public sector bank. All six banks above us have either a tieup or a standalone subsidiary in insurance or asset management. I have a timeline of 1.5-2 years. Finding the right partner, due diligence, valuation, discussions and regulatory approvals will take time. We have not shortlisted any partner yet,” he said.
The Chennai-headquartered lender also expects to launch a separate vertical offering wealth management services in the second half of the FY27 and is hiring specialists.
Kumar also said the bank plans to strengthen its liability franchise following the mobilisation of around $2.4-2.5 billion through Foreign Currency Non-Resident (Bank), or FCNR(B), deposits. The funds have been used to retire bulk deposits, replace higher-cost overseas funds and support credit growth.
“Part of it has gone towards retiring bulk deposits, part towards replacing higher-cost overseas funds and part towards credit growth. Bulk deposits have come down, while FCNR(B) is classified as retail term deposits. So, the overall term deposit base will remain broadly the same, but the mix will change. My target is to maintain current account saving account at around 39 per cent-40 per cent,” Kumar said.
Around $2.3 billion of the $2.5 billion raised has already been deployed in overseas credit markets, with depositors taking loans from GIFT City, Singapore, and Dubai. The bank expects overall credit growth of 14-15 per cent.
“Since FCNR(B) is a stable five-year deposit with a locked-in price, we can consider some corporate lending to that extent,” he said.
Indian Bank has a corporate loan pipeline of around Rs 60,000 crore, with demand in green finance, data centres and logistics.
FCNR(B) deposits also provide some benefit from a liquidity coverage ratio perspective, as they are largely in the five-year bucket, compared with bulk deposits that can mature within 30 days to one year. The bank estimates the benefit at around 2-3 basis points.
The lender has guided for a net interest margin of 3.10-3.25 per cent and expects to protect margins if interest rates remain unchanged. More than half of its loan book is linked to external benchmarks, allowing loan rates to reprice faster than deposits if interest rates are raised.
