Indian Bank Records Rs 700 Crore Profit from Priority Sector Lending Certificate Sales Amid Boosted Q2 Profits
Indian Bank recorded a Rs 700 crore profit from PSLC sales in FY25 to date, as it increased its focus on agriculture, MSMEs, and retail sectors. The bank's Q2 profits also rose by 36% to Rs 2,706 crore, supported by higher interest income and reduced provisioning costs.
Indian Bank Records Rs 700 Crore Profit from Priority Sector Lending Certificate Sales Amid Boosted Q2 Profits
Indian Bank reported over Rs 700 crore in profits from the sale of priority sector lending certificates (PSLCs) so far in the current fiscal year, reflecting its strategic emphasis on advancing sectors like agriculture, small businesses, and MSMEs. The Chennai-based bank announced a significant 36% increase in its second-quarter net profit, reaching Rs 2,706 crore, driven by elevated interest income and lower provisioning costs.
At a recent press briefing, SL Jain, MD and CEO of Indian Bank, highlighted the growth in PSLC profits, which rose from Rs 479 crore in FY23 to Rs 657 crore in FY24, and Rs 727 crore in FY25 to date. “This PSLC segment is not only profitable but also provides strong returns,” Jain stated. Per RBI mandates, scheduled commercial banks must allocate 40% of their adjusted net bank credit to priority sector lending (PSL), which encompasses loans for agriculture, MSMEs, housing, and microcredit. Banks exceeding PSL targets can sell PSLCs to those falling short of their targets.
As of September 2024, Indian Bank’s PSL advances stood at Rs 1.88 lakh crore, comprising 44% of its adjusted net bank credit. Within this, agriculture advances held the largest share at Rs 87,896 crore, with Rs 81,246 crore allocated to non-corporate farmers and Rs 52,434 crore to weaker sections.
Indian Bank’s focus on the retail, agriculture, and MSME (RAM) segment remains central to its lending strategy, making up 63% of its Rs 5.13 lakh crore domestic advances by the close of the September quarter. The RAM segment saw a 14% YoY growth to Rs 3.25 lakh crore, while corporate loans grew by 9%, reaching Rs 1.88 lakh crore. Jain reaffirmed the bank’s guidance for overall credit growth between 11-13% and deposit growth between 8-10% for the fiscal year. He also reiterated a target recovery range of Rs 7,000-7,500 crore.
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