In the last decade, led by MD & CEO Romesh Sobti, IndusInd Bank has seen its business soar. It is now eyeing the rural sector while keeping a hawk’s eye on asset quality.
Given the mountain of bad loans piling up in the books of banks, dark clouds of a crisis have been hovering over the Indian financial system. Nearly a dozen state-run banks are under regulatory watch besides two high-profile CEOs from the private sector—Chanda Kochhar of ICICI Bank and Shikha Sharma of Axis Bank—coming under the scanner for governance issues. Amid the gloom, IndusInd Bank, led by its MD & CEO Romesh Sobti, appears to have muscled its way to find its rightful place under the sun.
Sobti, 68, took charge of the Mumbai-headquartered lender in February 2008, when IndusInd was a dwarf compared to its peers. Since then, the bank, promoted by the Hinduja Group, has seen a near-15fold jump in profit, a six-fold jump in net interest income, a well-diversified loan book and an improvement in several key performance metrics.
The growth has been steered by Sobti, who came from ANZ Grindlays Bank (now Standard Chartered Bank), succeeding Bhaskar Ghose. Bringing in a new team, Sobti set about to restructure the balance sheet, boost profitability, improve the business mix and expand through current account-savings account (CASA) growth and acquisitions.
When Sobti took charge, IndusInd had a high share of relatively low-yielding fixed rate loans in its book. At a meeting with analysts in January 2008, the bank said that only around 31 percent of its total loan book was on floating rate and most of it (67 percent) was fixed-rate loans. A floating rate helps a bank improve its earnings projections and net interest margins. Sobti has since ensured that the bank has a better mix. Now, of the total corporate loans, 60 percent is linked to the Reserve Bank of India’s (RBI) marginal cost of funds based lending rate (MCLR) and out of total loans, 40 percent is linked to MCLR. Its corporate loan book has a tenure of 270 days on an average.
Esta historia es de la edición August 31, 2018 de Forbes India.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición August 31, 2018 de Forbes India.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
Home-Cooked Meal Is Now Greatly Valued
The pandemic has also brought with it an improved focus on hygiene, use of technology in dining, rise of cloud kitchens and resurgence in popularity of Indian ingredients
Paytm 3.0 - Reaching Near Breakeven In Two Years
As of 2020, Vijay Shekhar Sharma’s super app for financial services had run up losses in thousands of crores. Now, as digital payments gets yet another boost courtesy Covid-19, he’s hopeful of reaching near breakeven in two years
THE PANDEMIC HAS CAUSED WOMEN GREATER LABOUR PAIN
Covid-19 has shown that women are more likely to face the brunt of job losses than men, and find fewer opportunities when they want to resume. That apart, several have to deal with increased hours of unpaid work at home and even domestic abuse
LEADERSHIP WILL BE ABOUT SEEING THE BIGGER PICTURE
Leaders must not only guard their teams first during a crisis, but also deal with stakeholders with respect and dignity. And apart from pursuing business goals, they should remain committed to our planet and the environment
PHILANTHROPY SHOULD BE HUMBLE, BUT NOT MODEST
Apart from building a flexible and resilient framework for the future, philanthropists, civil society and the government must work in tandem so that every rupee is absorbed on the ground
INTEGRATED HEALTH CARE, TECH WILL DISRUPT SECTOR
While clinical research will get a boost, having a skilled workforce and public spending on health care will be challenges in the near term
DIGITALISATION WILL HELP IN VALUE CREATION
As the pandemic brings technology and innovation to the core of business and daily life, the next decade will see about 150 million digital-first families in India
Industry 4.0: Climate Revolution?
Augmenting sustainability alongside digital capabilities is an economic, competitive and global opportunity for India’s businesses, but regulations need to reflect intent
EV Dream Still Miles Away
Electric vehicles have remained a buzzword in India for years. But not much has moved on ground due to high upfront costs, range anxiety and charging infrastructure
Living Waters
A virus has caused us to scramble for oxygen but our chokehold on the environment is slowly strangling the very waters that breathe life into us. The virus is a timely reminder: We are merely consumers, not producers of life’s breath on this planet
