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How Indian Overseas Bank is trying to mislead with an ad

Indian Overseas Bank published an ad with a header “Performing Consistently, Growing Exponentially” while releasing its December quarter results. Only growth the Bank has shown in past five quarters is in bad loans

The slowdown observed in the manufacturing and service sectors has affected the entire economy very badly.  This has given very worst impact to the banking sector, especially public sector banks. Most of the public sector banks have delivered bad results quarter after quarter during this year. They are saddled with surging bad loans and huge provisions to meet the bad loans.  This trend may continue till we witness visible recovery on the overall economy. 


On 31 January 2014, I saw December quarter results of Indian Overseas Bank, published in the Hindu Business Line with the following header…

“Performing Consistently, Growing Exponentially”


I was really surprised to see such headline from the Bank as their financial results for the past five quarters were not encouraging at all. The ultimate performance of any entity or bank is measured by the profit generated by that entity.  Among all indicators, increasing profitability depends upon the following parameters…

  1. Low cost deposits
  2. Selection of good borrowers
  3. Non-fund based income and other income
  4. Low level of bad loans and provisions
  5. Robust follow-up mechanism of the Bank on their credit accounts

I furnish below the essential indicators of Indian Overseas Bank for the past five quarters.

                                                                                  Rupees in crore


Dec 2012

Mar 2013

June 2013

Sept 2013

Dec 2013

Net Profit






Gross NPA












% of Net NPA






Provisions made







The gross non-performing assets (G-NPAs) and net non-performing assets (N-NPAs) of the Bank are growing rapidly.  Net profit of the Bank is declining. The huge provisions made towards bad loans are eating away the profit of the Bank.  Bank should take strenuous efforts to arrest the above trend. 


Oriental Bank of Commerce (OBC), one among the public sector banks, has got total business of Rs3.16 lakh crore (total deposits of Rs1.82 lakh crore and total advances of Rs1.33 lakh crore from 2,089 branches). The business level of Indian overseas Bank is higher than Oriental Bank of Commerce with total business of Rs3.87 lakh crore, total deposits of Rs2.13 lakh crore and total advances of Rs1.74 lakh crore from 3,117 branches.  It is pertinent to note that Oriental Bank of Commerce has generated net profit of Rs224.30 crores for the quarter ended 31 December 2013.


On the other hand, City Union Bank, one of the scheduled commercial bank based at Kumbakonam, with 400 Branches and a total business of Rs36,941 crores, total deposits of Rs21,116 crore and total advances of Rs15,825 crore, has earned a net profit of Rs89 crores for the same quarter. 


It is to be noted that opening of more number of branches alone does not serve any purpose. There should be close follow-up action by the executives at the helm to build up business and make the branches earning sizeable income. Apart from rural branches, all other branches should break even in a couple of years. 


Had the increase in deposits and advances of Indian Overseas Bank earned substantial profit, the headline in the ad on the top of their results for the quarter ended December 2013 would become meaningful. The IOB team should create excellent results and not the ad.



Simple Indian

3 years ago

While private & public limited firms routinely cook up figures like this to woo corporate FDs at 'attractive' rates from gullible investors, such practices by PSU Banks is deplorable. After all, banking is all about trust. But, when it comes to profitability, PSU Banks in general are notorious for their extravagance (indiscriminate expansion of Branch & ATM network) and poor service levels. Most new Branches of even large Banks like the SBI aren't offering more than the basic services of S.B. A/c or a current A/c for businesses. Wooing customers with unethical practices will have a telling effect on Banks like IOB, which they will realize sooner or later.


Dayananda Kamath k

In Reply to Simple Indian 3 years ago

chidambaram is also doing the same with the budget the trend is percolating down.

Ramesh Poapt

3 years ago

As rightly said by others,ALL PSU banks mislead by highlighting flimsy areas of better performance.If say two factors so called better mentioned, there are seven bad areas where performance has deteriorated,which is serious.Growth in advances is say 12or 15%, NPAs rise is 30 or 40 or 50%.Now where is improvement?It is clearserious deterioration!But who cares..Statutorily,this should be made mandatory...United Bank of India is critical/in ICU,financial healthwise..

Dayananda Kamath k

3 years ago

dena bank also did the same thing. corporation bank also doing it since last two quarters and i even complained to sebi also but of no avail.regarding iob it is less said better.cmd when he was manager double financed same asset under govt scheme of dri in connivance with dealer in goa for sewing machines which is already financed by another branch of the same bank. his enquiry was fasttracked to facilitate his promotion to ed.even police gave an endorsement that the criminal complaint against him and other executives of the bank is of service matter. all these matters are brought to the notice of cvc,president of india,reserve bank of india, but pormoted as ed and fasttracked to be chairman. he once used his might to provide finance to a burocrat in nigerian back to back l/c fraud. but due to timely intervention through the employee director and chairman it was avoided. hence it is no wonder that iob is the number one in amounts involved in frauds in 2013.

yesh veer arya

3 years ago

Not only Indian Overseas Bank every bank is misleading public they are highlighting only those fields I which they have some positive figures, in one quarter I analysed qr result of IOB and there was mistake and I spoken to CMD then result republished. When you will go through the AD of SBI regarding concession to women for housing,it will have very meagre effect on interest morethan amount is spent on ads,banks are spending too much amount on wastefull expenditure like ads,miscillenious there is no decrease in expenses of stationery and postage inspite of core banking banks require no sanction and have money with then so they are spending lot of money to oblise FM. There is flood of bank branches in shivganga in TN Canara bank is going to purchase 700 coins dispensing machines they will become useless when RBI will not supply coins to them. Bank.s officials will earn too much in this deal. Govt should stop appointing CMDs and EDs from other banks if Govt want to decrease NPA yesh veer arya dehradun


3 years ago

IOB is not the only Bank which is reeling under heavy NPAs. The Nation,s banker viz., SBI is not in any way inferior to IOB. It is unfair to compare the performance of nationalised banks vis a vis the Private Sector Banks. How many of the private banks stick out their necks to finance the backbone sector - viz., agriculture and Education Loans. Is not the duty of RBI to make them adhere to the norms prescribed by them to make a level playing field. Double standards of the regulator is very latent. God save this nation.

“Start where you are, use what you have and do what you can”

That is the advice of Shubhra Bharadwaj of Ferriswheel Entertainment, which has carved a niche for herself in a highly competitive event management industry

In just five years after she started Ferriswheel, a Mumbai-based event management company, Shubhra Bharadwaj has managed several large events such as the Commonwealth Games at Delhi in 2010, the First South Asian Winter Games at Dehradun, Auli in 2011 and the Kerala Handover Ceremony at the National Games Ranchi 2011. Her company, Ferriswheel Entertainment Pvt Ltd also handled several popular stage productions such as ‘Ticket to Bollywood’ & ‘Bollywood Through the Ages’, which focus on promoting performing arts in and outside the country.


Ms Bharadwaj now conceptualises shows and designs and executes different aspects of event planning. She is passionate about encouraging folk dancers and artists and this in turn has led the company to gain international fame and helped her make a mark in this competitive industry.


Read about her journey in these excerpts from her interview with Hitisha Jain of Moneylife:


Hitisha Jain (ML): Tell us about your business and how it all began?


Shubhra Bharadwaj (SB): I started Ferriswheel in 2009 with a clear agenda to become the best in the business. We are a one-stop entertainment and event solution company, which can deliver large-scale public events. This means, if my client is happy, that doesn’t mean my crew is unhappy or my artist is unhappy. I work harder, earn less money, but we have strong goodwill in the market.  The company in the long run hopes to be a game changer in the performing arts industry in India. Ferriswheel’s current turnover is approximately Rs20 crore and the business is valued at about approximately Rs30 crore.


ML: What inspired you to set up this organisation?

SB: The professionalism in the West and an eye for detail. I have lot of exposure to the West as I have lived there. What I learnt there was that people have a very fine eye for detail and do lot of planning. So, by the time event rolls out, it is very cost effective and efficiently done.  That was one of the things I learnt, when I worked in 60 different countries such as Japan, US, the Caribbeans, Canada and others over a 20-year period. I felt that in India at that time, we used our skilled work force and evolved aesthetic sense, but compromised on delivery with the result that there was no benefit to the artists or the client. So it was very exciting for me to set up an organization, which challenged norms and conventions in creative and management practices and which would set a bench mark for the industry.

ML: How do you deal with the many hitches that are part of starting a business?

SB: Challenges are a part of the game. One has to remain motivated and inspired and keep the team going. Expecting an easy or smooth start is the first step towards failure. There are no signboards, no guarantees and nothing given. In fact, as a person who is a non-conformist, I found it thrilling to play by my own rules and engage in an unstructured environment to create the brand and establish the company. 


ML: What drives you to keep doing the work everyday?

SB: People and places. I am a peoples’ person and I enjoy the action and energy of this industry and the work dynamics of people who choose to be a part of it. I enjoy this work and this is the work, I know. Everyday is exciting for me because some thing or the other is happening in each department, which challenges me. Ferriswheel is my ticket to the world and it opens doors and avenues for me and the team, which makes our lives exciting.


ML: What plans do you have for your business?

SB: To consolidate, restructure and grow into better profit making centres for each vertical in a professional way.


ML: Who are your main supporters?

SB:  The government of India has been very supportive. The Indian government loves me and I love them. We received support from the Indian Council for Cultural Relations (ICCR), Ministry of External Affairs and the tourism ministries from various states such as Kerala, Haryana and the Andamans. But, while I have support from many individuals and organisations, at the end of the day, it is a driven and motivated team, which is the reason for Ferriswheel's success.


ML: Why is it important to encourage entrepreneurship in India, especially among women?

SB: It is important to encourage entrepreneurship in any country and for any gender. Like poets and artists, entrepreneurs are strong spirited individuals challenging the norms, structure and conventional thinking and business practices. The economy of any country or region sees a shift if there is a thriving entrepreneurial culture.


ML: What is the main source of funding for your organisation?

SB: We have been extremely lucky to be making money from the time we were established and Ferriswheel has been able to pay for its own growth. We started with Rs4 lakh, which I invested from my pocket. We were in business the day we opened this agency. So we always earned our own money and because all our eggs are not in same basket, we sometimes face a liquidity crunch.


ML: What were the biggest challenges you faced as a woman entrepreneur?

SB: The challenges were same as any man would also have had faced. Like, protecting our interest, living through a liquidity crunch, team motivation, foul play by the competition and structure and procedures within companies are few of the challenges I had faced. I work in very difficult terrains. We have worked at places where the temperature was -16 degrees celsius, sometimes at -30 degrees celsius or sometime at 54 degrees celsius. Weather conditions are a challenge for us as the team has to adapt to it. People leave their families and work, but if you have a good show then it’s all worth it. Women are strong and they can face any challenge that comes up.


ML: What are the best ways to connect in your industry – which national and local networking organisations, conferences have you found most valuable? 

SB: I generally don’t enjoy these outings. I think these are kitty parties. I don’t like going to do any networking events. But I do meet people. I had a great outing at the US Consulate General Peter Haas’s house. There are many networking platforms, which have been valuable to the business Assocham, CII, the Indo-foreign chambers etc.


ML: Share your secret weapons – what business apps, tools or mottos help you run your business and life efficiently? 

SB: Here, I want to share two important points. Firstly, once you make up your mind then you can’t change it. Stick to what you have decided. Secondly, in my view, the big difference between successful people and not so successful people are how you utilize your free time. My free time is my most productive time. I strategise, organise and plan ahead for each team and team leader so that by the time I meet people I am always prepared. But when I am alone, I don’t waste time channel surfing and using Facebook. I am not a dustbin for world information. I select what I want to put into my brain. It helps me to be efficient and organised.


ML: What plans do you have for the future for your company?

 SB: The plans for the future are to restructure and consolidate the business and push for better profit margins on all five existing verticals. We are like five companies under one umbrella. Till now, we were working on building the goodwill in the market. We have already achieved that. Now, I want to streamline structure of the company.

ML: What are major opportunities for women to start their own businesses?

SB: All opportunities in every business are instinctively pursued. We can never generalize opportunities for a gender or an industry. Each entrepreneur's and company's growth graph is based on multiple components, which translate into actualizing opportunities. This industry does have potential for growth, profits and great conversions if one pursues it with conviction. If somebody really wants to do something, then there is no mountain that cannot be climbed. So it is not about a woman, there are so many women out there. Somebody wants to do and somebody doesn’t want to do. Opportunities exists everywhere, it is upto a person or an individual. A good intelligent woman can make an opportunity out of nothing. Opportunity should be created.


ML: Who is your role model?

SB: All entrepreneurs who have value based success stories in my time – NR Narayan Murthy of Infosys, Richard Branson of Virgin, and Bill Gates of Microsoft.


ML: What three things would you advise to aspiring women entrepreneurs?

SB: Start where you are, use what you have and do what you can.


(In the run up to International Women’s Day on 8th March, Moneylife will run a series of Women Entrepreneurs who have made a mark. If you know women who ought to be featured in this series, do write to us with details at [email protected] . And if you are a women entrepreneur wanting to expand your business and grow, do keep in touch with our not-for-profit entity at - we have some news in store)


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