Indian Bank has decided to delay its follow-on public offer (FPO) in view of the bearish equity market, said Mr T.M. Bhasin, Chairman and Managing Director.

The bank is not in dire need for capital as it is well capitalised, he said. “The equity market is not conducive to raise money. This is not an opportune time for the FPO.”

The bank is looking to raise Rs 1,500-1,600 crore through the FPO which was expected in September-October. After the FPO, the Government's stake in the bank would have declined to 70 per cent from 80 per cent.

Speaking to reporters on the sidelines of a banking seminar in Mumbai, Mr Bhasin said the bank has a Capital Adequacy Ratio of 13.56 per cent and that is sufficient to meet credit growth of 20 per cent, which it is targeting in the current financial year.

One of the steps the bank has put in place to reduce non-performing assets is to focus on Special Mention Accounts. Regular follow-ups ensure that such accounts don't slip into NPAs. “We were the first nationalised bank to move to the system-based identification of NPAs. This helped reduce the gross NPAs from 1.45 per cent in June 2010, to 0.98 per cent in June 2011,” Mr Bhasin said.

On the retail front, the bank has declared this year as the year of recovery of retail NPAs. “Its not that NPAs are high in this segment. But we have technically written-off accounts to the tune of Rs 1,700 crore. If we reduce that it will add to our profit,” he said.

The bank is also focusing on increasing the share of retail loans by setting up retail hubs and special marketing teams. It is also carrying out a campaign to increase the share of current and savings account deposits, he added.

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