INDIAN OVERSEAS BANK (IOB) is betting on revival of corporate credit demand in H2 FY26 to balance its lending mix, which is currently dominated by Retail, Agriculture, and MSME (RAM) segments. RAM accounts for 78.92 per cent of the domestic credit portfolio, but the bank aims to reduce this to around 70 per cent. Corporate lending is managed through 10–12 metro branches, while RAM is supported by over 3300 branches.
Ajay Kumar Srivastava, Managing Director and CEO said, “Capability is not the issue. What we need is a pipeline of credible, viable proposals.” He added that the bank has the capital strength and risk appetite to support large borrowers. IOB’s advances grew 14.05 per cent year-on-year and nearly 5 per cent sequentially, while the total business mix rose 12.19 per cent to Rs 5.93 lakh crore, nearing the Rs 6 lakh crore mark. The credit-deposit ratio stands at 79.33 per cent.
Growth focus areas include sectors under the government’s Production Linked Incentive (PLI) scheme, manufacturing, NBFCs, and existing corporate clients’ capex. Srivastava highlighted IOB’s ability to underwrite loans in sunrise sectors on par with peers. The gold loan business, a RAM driver, remains strong, growing about 38 per cent last fiscal, with similar momentum expected this year. On asset quality, IOB has sold 50 – 60 per cent of Rs 11,000 crore identified for transfer to ARCs over the past 8 – 10 months, and is revaluing assets to address valuation mismatches.
In FY25, Public Sector Bank IOB set up seven Retail Loan Processing Centres (RLPCs) in Mumbai, Delhi, Kolkata, Bengaluru, Lucknow, Coimbatore and Chennai to accelerate digital loan processing, improve compliance and reduce turnaround time. This is in addition to its Hyderabad centre and will speed up digital loan processing and reduce turnaround times. The bank will also adopt a new UPI switch with advanced scalability, selecting the service provider through an open market process.