Central Bank plans new businesses to improve profitability

Central Bank of India, having come out of Prompt Corrective Action (PCA) a few years ago, is now getting into new businesses to further improve it’s performance and profitability.

It is entering into wealth management to get good quality of customers. For this foray, the bank is going to hire people. It has also decided to restart credit card business which was closed years ago.

“Central Bank was the first bank which gave credit card to Indian banking industry. Currently we don’t have. We will start the credit card this year,” Kalyan Kumar, MD & CEO, Central Bank of India said in an interview.

The lender has decided to create a sales and marketing team for which interview is going on. It will hire 500 people in marketing to scale up business.

NRI business

He said the bank will start NRI business to get more fee-based income. “We are going to conduct exporter meets so that more and more exporters should come to our fold where more fee-based income can be generated,” he said.

“So, with this, I am confident that we will exceed our directions which we have given to the market,” he emphasised.

As of March 26, the bank’s overall business growth was 15.67%, deposit had grown by 13.38%, advances by 18.76%, corporate advances by 14.5%, RAM by 20%, retail by over 25%, agriculture by 17.60%, and MSME by 17.06%. CASA ratio was 47.30% and CASA saving account had grown by 10.05%.

“So where other banks are struggling for resources, Central Bank of India was very comfortable in terms of mobilization of resources and also credit growth, both in terms of RAM and corporate credit,” Mr. Kumar said.

In terms of asset quality slippages were reduced to 1.16% from 1.45% a year ago. Gross NPA side also, it was 2.67% and net NPA 0.49% and in terms of profitability, it booked profit of ₹ 4,369 crore, 15% growth year on year.

During the year, the bank took a hit of ₹632 crore because it had identified its deferred tax asset on 25% tax rate instead of 35%. “Therefore we took a one-time hit and we will get benefit in this year, of more than ₹600 to ₹700 crore on annual basis in profitability,” he said.

For the current year, the bank has given guidance to the market, that its deposit growth would be in the range of 10-12%, advances would grow in the range of 14 to 16%, CASA is going to be 48 plus minus 1%.

“For profitability, ROA, we have given guidance that we are going to remain more than 1% and net interest margin (NIM) more than 3%,” he added.

“We have proper strategy and plan for achieving these targets in current year and already we have started working on those lines. For the liability side, we have designed and developed number of products aligning with different segments of customers like for youngsters, female, business persons, defence personnel and paramilitary forces,” he said.

The bank is targeting religious places, trusts, associations, society, club accounts. It is also targeting the doctors’ community and the Parsi community to have good growth in liability side both in CASA and term deposit.

On the asset side, the bank believes that agriculture and MSME would be its two main growth engines.

“For agriculture, we are focusing on self-help group and gold loans and on the MSME side we are focusing upon cold storage, like warehouse, business projects, hotels projects,” he said.

Similarly, on the corporate side the bank is focusing on renewable energy, HAM projects, data centre projects.

“We are sure with the capabilities we have built, we are sure to achieve the guidance which we have given,” he emphasised.

In capability building side the bank has invested in terms of people, process and technology.

Since the bank was in PCA for five years and it was the last bank to come out of PCA the cadre in charge of handling credit products needed improvement.

“The thousand officers are undergoing training for credit, those are new fresh officers. Also, we have started flagship training program for core credit,” he said.

On the technology side, the bank offers over 19 digital journeys where in customer on their own they can get a loan sanctioned and amount will be transferred to their account.

Now the bank’s major concern is per branch business which was ₹117 crore as of December and has increased to ₹170 crore at the end of the year.

“But still our peers are doing more than ₹200 crore. So that is our aim,” he said adding the bank’s CD ratio needs to be more than 80.

On whether the West Asia conflict had any impact on the bank he replied in negative.

“Till now actually we have not felt any impact. Honestly speaking, we are alert now and we are doing portfolio stress testing by our risk management department and also credit monitoring department. But our slippage in the month of April was better than as of March. That’s why I can tell you that we have not felt any impact yet,” he emphasised.

Mr Kumar who joined the bank less than 8 months back has been stressing on change management and boosting the all-round development of employees.

Published – May 23, 2026 11:15 pm IST