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Industrial Development Bank of India ( IDBI) had been planning to extend the tenure of CEO Rakesh Sharma whose six-month term is slated to end in April.
Sharma was appointed in October 2018 to ensure a smooth transfer of majority ownership from the government to LIC. Life Insurance Corporation of India (LIC) recently acquired a majority stake in IDBI Bank.
In a statement on Sunday, the bank said it is “professionalizing and broad-basing its board". It said it has inducted on the board, two “new eminent professional independent directors" and added that the new board will chart out a fresh growth strategy and also revamp the corporate governance structure.
As part of the process, the statement said, IDBI Bank has started reviewing all its policies including credit, investment, and internal processes, as well as risk management practices with the help of consultants.
“Furthermore, the bank has also started revamping its Performance Measurement System (PMS)—IDBI Performance Assessment and Continuous Evaluation (i-PACE)—to make it more objective and system-driven," the bank said.
Sharma, a former MD, and CEO of Canara Bank, was among the few bankers hired in 2015 from the private sector to lead big state-run banks. At IDBI Bank, he took over from B. Sriram, former MD of State Bank of India, whose three-month term ended in September.
According to the bank’s statement, IDBI Bank and LIC, through their collective network of branches, offices, and workforce, have started leveraging their mutual business synergies. “The major areas of synergy identified for the immediate short term are pertaining to selling of LIC policies through IDBI bank branches, management of cash and other premium receipts of LIC through the bank’s branches," it said.
“The long-term strategy includes common investment strategy, use of other resources like real estate, commercial and residential space, IDBI Bank branches, premises and ATMs, digital marketing, rationalization of the common subsidiaries in mutual funds, and life insurance," said IDBI Bank.
In the December quarter of FY19, IDBI Bank reported a net loss for the ninth straight quarter as the lender continued to set aside higher provisions for its bad loans.
Net loss for the quarter stood at ₹4,185.48 crore against ₹1,524.31 crore in the same quarter last year. As a percentage of total loans, gross non-performing assets (NPAs) stood at 29.67% as compared to 31.78% in the previous quarter and 24.72% in the same quarter a year earlier.