IOB charts ₹1,400cr spend for digital boost

Public sector lender, Indian Overseas Bank (IOB), has embarked on digital banking initiatives with an estimated spend of about ₹1,400 crore, while it will also be hiring about 450 people as restrictions have been eased for the Chennai-headquartered bank to drive future growth.

The bank faced many restrictions imposed upon it by RBI after it was brought under ‘prompt corrective action’ (PCA) in September 2015 due to a huge surge in NPAs on account of various factors. Gradually, the bank reduced its NPAs and improved its capital adequacy ratio above required levels. The Centre also supported it with a capital infusion of ₹24,074 crore during FY18-FY22 through recapitalisation bonds.

After incurring losses for 18 quarters, it came into the black in March 2020 quarter, driven by a reduction in legacy stressed assets. Since then, it has been generating profits consistently, while other parameters also improved. with sustained good performance, IOB came out of the PCA framework in September 2021, and restrictions were eased.

“We have come a long way. In the past couple of years, we gain the confidence of all stakeholders and staff morale turned positive,” Partha Pratim Sengupta, MD and CEO of the bank, told businessline. Acknowledging the efforts of his predecessors, he said, “We added more measures.”

The bank has now embarked on digital technology initiatives “with a very high budget of about ₹1,400 crore” for the next three years, he said. He explained that the IT spend is in tune with its new vision of “emerging as the preferred bank connecting generations with high standards of ethics and governance.”