The Turnaround of Indian Bank
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Case Code: BSTR104 Case Length: 10 Pages Period: 1992 - 2004 Pub Date: 2004 Teaching Note: Available |
Price: Rs.300 Organization: Indian Bank Industry: Banking & Finance Countries : India Themes: Turnaround Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
"The case of Indian Bank is a case of political blunder. The solution is not closing down the bank but stern action against the defaulters so that repayments are made. This is the way to serve the interests of the depositors."
- Gurudas Dasgupta, CPI Rajya Sabha member in 2000.
"During the three years of the restructuring plan, the bank could achieve consistent growth in business and also sustain its turnaround due to initiation of various structural, operational and cost control measures. The bank has also worked on marketing and motivational strategies and strengthened its planning and monitoring systems."
- Mrs. Ranjana Kumar, chairperson and managing director, Indian Bank in 2003.
Indian Bank Achieves a Turnaround
In mid-2002, Indian Bank, a prominent public sector bank (PSB) in India, posted a net profit of Rs 33.22 crore for the fiscal year 2001-2002. This marked Indian Bank's return to the black after being in the red for six consecutive years, following an industry record loss of Rs. 1336.4 crore in the fiscal 1995-1996.
In 1999, Indian Bank was formally recognized as a weak bank by the Verma Committee, set up by the Government of India (GoI) earlier that year. Following this, the bank embarked on a comprehensive restructuring program, under the leadership of Ranjana Kumar (Kumar), who was known in the Indian banking circles as the "Turnaround Queen" for her unique ability to create something worthwhile out of the most hopeless banking failures. The restructuring process, eventually led to the turnaround of Indian Bank in 2002. By 2003, the bank was looking forward to a promising future. Analysts said that the turnaround of the Indian Bank was one of the most successful turnaround cases in the history of Indian Banking....
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