IDBI Bank Limited provides various banking and financial solutions to its customers.
The bank has a wide presence with a network of branches, comprising metro branches, urban branches, semi-urban branches and rural branches (including Financial Inclusion branches) across India, overseas branch at Dubai International Financial Centre (DIFC), Dubai and International Financial Services Centre (IFSC) Banking Unit (IBU) at Gujarat International Finance Tec–City (GIFT), Gandhinagar. The bank also ser...
IDBI Bank Limited provides various banking and financial solutions to its customers.
The bank has a wide presence with a network of branches, comprising metro branches, urban branches, semi-urban branches and rural branches (including Financial Inclusion branches) across India, overseas branch at Dubai International Financial Centre (DIFC), Dubai and International Financial Services Centre (IFSC) Banking Unit (IBU) at Gujarat International Finance Tec–City (GIFT), Gandhinagar. The bank also served its customers through its network of ATMs and e-lounges on a pan-India basis. At the same time, the bank added several functionalities in its digital touchpoints, viz. internet banking and mobile banking, with an endeavor to create a seamless omni-channel experience to its customers.
Business Strategy
The bank continued to maintain strong focus on resource mobilization, driven by growth in deposits and also maintained low-risk loan mix through focus on lending to the retail and priority sector.
Retail Banking
Retail Liability Products
The company offers a gamut of deposit products, specifically designed to cater to the banking requirements of customers from all segments of the society. The company pursued its endeavor of fine-tuning products/ processes, in tandem with the changing consumer preferences in the midst of evolving market dynamics. The bank implemented technology in digitizing the customer on-boarding journeys through its Video Account Opening (VAO) platform.
In line with its customer engagement approach, the bank extensively used data analytics and adopted Customer Relationship Management (CRM) tools for driving targeted product offerings and for enhancing its business penetration.
NRI Services
The company offers a wide array of products across the spectrum of non-resident (external) (NRE) deposits/ non-resident ordinary (NRO) deposits/ foreign currency non-resident (FCNR) deposits, investments, including equity market investments through Portfolio Investment Scheme (PIS), remittances and loans to meet the banking and financial needs of the Indian diaspora across the globe. The company continued to undertake product/ process improvements for augmenting customer experience, service delivery and convenience of banking for its NRI customers.
Retail Assets
The company continues to target a progressively larger retail business portfolio in keeping with its intended positioning as a full-service new generation commercial bank. The bank offers a bouquet of retail asset products, including Housing Loan (HL), Loan Against Property (LAP), Personal Loan (PL), Education Loan (EL), Auto Loan (AL), Loan against Securities (LAS), among other products. The products are periodically reviewed and modifications/ innovations/ customizations are carried out on a regular basis in tandem with the changing customer preferences. The company processes the structured retail loans on an Automated Loan Processing System, which helps in ensuring a faster Turn-Around Time (TAT).
To cater to the emerging needs of its customers, the company has launched new variant of Home Loan, viz. Ultra Saver Home Loan, wherein the loan is offered as an overdraft account which is intended at resulting in interest saving for customers with surplus cash flows. The bank has also launched digital Personal Loan to cater to the financing requirements of tech-savvy customers. Additionally, in order to support students from the Economically Weaker Sections (EWSs) of the society, the bank continues to extend subsidy benefit to education loan borrowers under the Government of India (GoI) schemes, such as Central Sector Interest Subsidy Scheme (CSIS), Dr. Ambedkar Central Sector Scheme of Interest Subsidy (CSIS) and Padho Pardesh Scheme.
During FY 2022-23, the company continued to remain a dominant player in the structured retail finance segment with best-in-class product offerings and services. The bank registered a growth of over 14% on an annualised basis in its structured retail asset book. Within the structured retail loan book, the housing loan segment registered a growth of around 16%.
Priority Sector Banking
The company has been contributing significantly to the Priority Sector Lending (PSL) as mandated by the RBI. As per the regulatory requirement, the bank primarily focused on financing to the agriculture sector and Micro, Small and Medium Enterprises (MSME) during the year. To extend its reach, the bank provided its services in the unserved/ under-served areas through its Corporate BC/ BF network. The bank had tie-ups with 43 Corporate BC/ BF service providers.
In terms of the GoI schemes/ directions, the company has been extending loans under various Central Government/ State Government sponsored schemes like Pradhan Mantri Mudra Yojana (PMMY), Stand-up India, Prime Minister Street Vendor Atmanirbhar Nidhi (PM SVANidhi), Prime Minister Employment Generation Programme (PMEGP), Agri Infrastructure Fund (AIF), etc. The company is also committed towards lending to the minority communities and the weaker sections, including Scheduled Castes/ Scheduled Tribes (SCs/STs). During the year, the bank launched two new products, viz. GST Plus and GST Express, in order to boost lending to the GST-registered entities. The company also entered into co-lending tie-ups with select partners.
Digital Banking
The company has upgraded the Mobile Banking App ‘Go Mobile+’ with NextGen look, improved and simplified customer journeys and incorporated various new features to enrich its customer experience. New features in the app includes online creation/ closure of fixed deposits, recurring deposits, e-nomination, online subscription to Mutual Fund, National Pension System, Public Provident Fund, Sukanya Samriddhi Account and other social security schemes of the Government, change of service branch, generation of loan statement & interest certificates, NACH mandate, ASBA IPO, NAMAN and doorstep banking services for senior citizens, etc.
The company has set up a dedicated ATM Command Centre for 24x7 monitoring of ATM infrastructure and availability. As a result, ATM availability has improved substantially. The company has also replaced more than 600 old ATMs during the year. The company has put in place the necessary governance structure for engaging with FinTechs to achieve its strategic objectives of digital transformation, innovation and growth to explore new customer segments, develop more innovative products, streamline internal processes for cost efficiencies and provide value added services to customers. The company has implemented Cardless ATM, Account Aggregator, API Services for digital on-boarding of retail loans, DigiKCC (Kisan Credit Card) and eSCF (Supply Chain Finance) in partnership with FinTechs.
Third Party Products and Capital
Market Products
The Third Party Product (TPD) segment of the company offers various value-added products and services to customers, keeping in view their risk profile and financial goals. During FY 2022-23, the company launched various campaigns for imparting necessary thrust in enhancing fee income and fostering healthy sales culture.
The company distributes various products that include life insurance products through its life insurance partners, viz. Life Insurance Corporation of India (LIC) and Ageas Federal Life Insurance Co. Ltd. (AFLI), general & standalone health insurance products through its channel partners, viz. New India Assurance Co. Ltd., TATA AIG General Insurance Co. Ltd. and Niva Bupa Health Insurance Co. Ltd., mutual fund through various Asset Management Companies (AMCs), viz. IDBI Asset Management Ltd., LIC Mutual Fund etc., capital market products, such as Demat Account, 2-in-1 Account (Savings and Demat accounts), 3-in-1 Account (Savings and Demat accounts linked to Online Trading account), Application Supported by Blocked Amount (ASBA) and Syndicate ASBA (SASBA), National Pension System (NPS), as well as bonds, such as Government of India (GoI) bonds & capital gains bonds.
The company undertook various initiatives for digitalising the third party product distribution. These initiatives include introduction of online mutual fund investment module, digital on-boarding in NPS account opening & e-nomination and mandatory KYC updation in Demat accounts through GO Mobile+ application.
The company enabled Demat account opening through its mobile and internet banking channels. The company also launched an abridged two-page Account Opening Form (AOF), viz. Duranto Demat Account, to extend the reach of Demat accounts to non-users of digital channels, by enabling instant Demat account opening with minimum documentation through the branch channel.
Synergies with LIC
Since LIC acquired majority stake in the company in January 2019, numerous initiatives have been taken to leverage the potential business synergies between the two entities. The company has identified specific action points in order to garner business in synergy areas through its best-in-class products and services especially in order to build low-cost deposit book, viz. current account book, along with efficient and optimal utilization of its distribution channels/ touchpoints to source business as Corporate Agent of the LIC under the bancassurance channel. The company has also been extending transaction banking services to meet collection/ payments related requirements of various offices of the LIC through its branch/ digital channels.
Corporate Banking
The Corporate Banking segment of the company comprises two verticals, viz. the Mid Corporate Group (MCG) and the Large Corporate Group (LCG).
The company’s corporate banking portfolio includes exposure spread over varied sectors, such as pharmaceuticals, engineering, power generation & distribution, EPC-infra, construction, telecom, cement, chemicals, basic metals and steel, mining & quarrying, engineering, electrical machinery, electronics & electrical equipment, power, oil & gas, fertilizers, automobiles, textiles, plastics, paper & paper products, rubber, Fast Moving Consumer Goods (FMCG), food processing, sugar, tourism, hospitality, education, agriculture & allied activities, transport, computer software & related activities, IT services & technology, Non-Banking Financial Companies (NBFCs), etc.
The company’s product basket for corporate clients includes term loans for both projects and non-projects, working capital (both fund-based and non-fund based), packing credit and post-shipment credit to exporters, bill discounting, intraday limits, etc. The company also offers various products, such as Short-Term Loan – Non-Committed Line, Receivable Buyout, Funding against Stand by Letter of Credit, etc. to cater to the financing needs of its corporate clients. Within the ambit of corporate banking, the company also places due emphasis on Priority Sector Lending (PSL) by offering products, such as channel financing and vendor financing for dealers/ vendors of corporates as also lending to NBFCs for on-lending to customers from the PSL segment.
Trade Finance
The company has a dedicated Trade Finance (TF) Department, which offers a wide range of products and services to its large/ mid corporate and retail customers at competitive pricing. The offerings range from the most commonly used products, such as inward/ outward remittances, Letters of Credit (LCs), Bank Guarantees (BGs), Standby Letters of Credit (SBLCs), etc. to more complex domestic and cross-border trade products involving import/ export of goods & services, pre-shipment & post-shipment export finance, short-term import trade credits (buyer’s credit and supplier’s credit), merchanting trade, capital account transactions, viz. Overseas Direct Investments (ODls), External Commercial Borrowings (ECBs), Foreign Direct Investments (FDls), mergers and acquisitions, opening of overseas offices, etc. These trade finance products/ services are offered through the Centralised Trade Processing Centres (CTPCs), which operate on a hub-and-spoke model at three major metro centres, viz. Mumbai, Chennai and Delhi. The CTPCs cater to the needs of all branches of the bank and thus, facilitate standardized processing, efficient communication and faster Turn-Around-Time (TAT). The company, as an Authorised Dealers (AD) Category I bank, has dedicated TF centres, which are authorized to handle all types of foreign exchange transactions.
Government Business
The company acts as an agent of the RBI in handling receipt and payment transactions of the Central Government and the State Governments. The company is authorized to collect Central Government Taxes, viz. Direct Taxes, Customs Duty and Goods & Services Tax. The company is actively collecting receipts in 16 states/ Union Territories (UTs). The company provides 24x7 internet banking facilities for tax payments. The company has enabled online collection of Employees’ Provident Fund Organisation (EPFO) and Employees’ State Insurance Corporation (ESIC) dues. The company is also authorized by the Government to offer Small Savings Schemes, viz. Public Provident Fund (PPF), Senior Citizens’ Savings Scheme (SCSS) and Sukanya Samriddhi Account Scheme (SSA) through its branches. The company is also authorised to disburse Central Civil, Defence and Railway Pensions.
In line with the GoI’s initiative, the company has gone live with more advanced and secured module for collection of direct taxes, i.e. Tax Information Network (TIN) 2.0.
Cash Management Services
The company is committed towards providing state-of-the-art Cash Management Services (CMS) to help corporates accelerate their collections, handle their bulk payments efficiently and smoothen their flow of funds. The company offers comprehensive range of CMS collections, payment and transaction banking solutions to suit the needs of corporates and put them in complete control of their cash position. The bank’s CMS products are unique and differentiated, catering to specific needs of large institutions, which help in creating long-lasting relationships with corporates and also add to new revenue stream. The bank is also in the process of upgrading its legacy CMS system to a new-age latest version available in the market.
The company offers various new age technology solutions like Liquidity Management Solutions, such as Corporate Liquidity Management Solutions (C-LMS) and Government Liquidity Management Solution (G-LMS), new-age CMS products, such as National Automated Clearing House (NACH), Virtual Accounts, Utility Payments through Bharat Bill Payment System (BBPS), Direct Debit, FASTag etc. In addition to this, the bank offers various other customised e-solutions that have been technologically integrated (through Host-to-Host technology) with client systems.
The company is also authorized to participate in e-freight payment system of Indian Railways and has been collecting e-freight in 12 Zones of the Railways. The company has also launched Quick iPay, which is an institutional collection product that enables institutions in Business-to-Consumer (B2C) segment to collect dues from their customers through all possible online and offline modes using one single system.
Treasury Operations
The company has integrated Treasury operations in various market segments like Money Market, Fixed Income, Foreign Exchange, Derivatives and Equities. The company’s Treasury operations involve active role in balance sheet management, liquidity management, maintenance of Cash Reserve Ratio (CRR) & Statutory Liquidity Ratio (SLR), Liquidity Coverage Ratio (LCR), trading & investments in market instruments and forex & derivatives transactions and also providing hedging solutions to customers.
The company’s Treasury has been actively participating in auction of Government Securities (G-Sec)/ State Development Loans (SDL)/ Treasury Bills (T-Bills) for its trading/ investment portfolio and market making in Government Bonds. The bank’s Treasury ensured regulatory compliances with respect to the CRR, SLR and LCR requirements in FY 2022-23.
To actively manage liquidity, the Treasury used various instruments, such as the Liquidity Adjustment Facility (LAF), the Standing Deposit Facility (SDF), the Marginal Standing Facility (MSF), the Term Repo and the Open Market Operation (OMO) of the RBI, as well as other market instruments/ platforms, such as Triparty Repo (TREPS), Clearcorp Repo Order Matching System (CROMS) and Call & Notice money. Surplus liquidity is deployed in various short term instruments like Certificates of Deposits, Liquid Mutual Funds, Call/ Notice/ Term Money and other placements/ investments etc.
The company is a Primary Dealer (PD) and is involved in market making activities for G-Sec. The PD desk ensured that all regulatory requirements like bidding commitment and turnover ratio for G-sec and success ratio for T-bill auctions etc. were met for FY 2022-23.
The company also provides Constituent Subsidiary General Ledger (CSGL) service to the Gilt Account Holders (GAHs). Further, in order to provide liquidity in the secondary market for retail investors under the RBI Retail Direct facility, the company also involves in market making by offering buy/ sell quotes to retail investors on the Negotiated Dealing System - Order Matching (NDS-OM) platform (odd-lot and Request for Quotes segment). The company’s IDBI Samriddhi G-Sec portal provides facility to the retail investors to invest in G-Sec through online mode and ATMs.
The company’s Treasury has active forex interbank and derivatives desk. The forex interbank desk provides competitive forex rates to clients. The derivatives desk provides various interest rates and exchange rate hedging solutions to client to meet their hedging requirements.
Investment Portfolio
The company’s Investments are government securities, government securities (including local authorities), shares, and debentures and bonds.
Regulatory Compliance
The company ensures compliance of various statutory and regulatory guidelines laid down by the Government of India (GoI), the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI) and other regulatory/ statutory bodies through a structured system of internal controls and tiered reviews.
History
The company was founded in 1964. It was incorporated in 2004. The company was formerly known as IDBI Ltd. and changed its name to IDBI Bank Limited in 2008.
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