At Indian Bank, the emphasis extends beyond growth metrics to the profile of borrowers

Credit growth at public sector banks is usually examined through asset quality, capital ratios and return metrics. At Indian Bank, Managing Director and Chief Executive Officer Binod Kumar argues that another lens is equally relevant. “We define social impact as integral to our core banking operations,” he says. “Beyond CSR, our lending and credit delivery are deliberately structured to reach vulnerable communities, empowering women, and strengthening livelihoods.”

That approach has earned the bank recognition in the Social Impact category in the BT-KPMG Survey of India’s Best Banks and NBFCs, the findings of which underline that the bank’s social footprint is driven primarily through its lending portfolio rather than standalone CSR activity.

Priority Sector

Priority sector lending anchors the bank’s inclusion strategy. As of December 2025, priority sector advances stood at `2.15 lakh crore, accounting for 43.75% of Adjusted Net Bank Credit—above the regulatory requirement.

Within this, agriculture and weaker sections account for a significant share. In Q3FY26 alone, the bank disbursed over `56,000 crore in agriculture loans, with `26,000 crore reaching 1.42 million small and marginal farmers. This year, `7,149 crore has been extended to SC and ST borrowers in agriculture.

Out of total priority sector advances, over 3% has gone to SC and ST borrowers and 9% to minority communities. “It is not just about meeting regulatory requirements but about ensuring that credit flows to the most impactful segments of the economy,” Kumar says.

“So, when we talk about social impact, it is about embedding financial inclusion into our everyday credit flows.”

MSMEs and Enterprise Lending

MSMEs contribute 17.73% of the domestic loan book, a share that has remained broadly stable over the past three years. The total MSME outstanding stood at `1.05 lakh crore as of December 2025, reflecting a 16% year-on-year growth.

Growth has been stronger in small and medium enterprises compared with micro units, indicating diversified expansion rather than concentration in a single segment.

“This reflects both cyclical credit demand and our calibrated approach to risk management, while ensuring steady support to the sector,” Kumar says.

The bank has adopted a cluster-based approach under the One District One Product framework, forming 74 MSME clusters with business of `7,289 crore. Its ‘MSME Prerana’ mentoring programme operates across 12 states and has reached over 2,000 entrepreneurs.

“We assess performance not only by credit growth but also by the depth of engagement,” he adds.

Government Schemes

Government-linked schemes form a substantial component of the lending mix. Under the Pradhan Mantri Jan Dhan Yojana, the bank has opened 24.5 million accounts with balances exceeding `13,000 crore. Under the Mudra scheme, `10,771 crore has been disbursed as of 31 December, 2025. Through PM SVANidhi, 772,000 street vendors have been sanctioned credit worth `1,208 crore. Under Stand-Up India, over 13,000 entrepreneurs have been supported with `2,839 crore sanctioned up to March 2025.

The Self-Help Group portfolio supports 505,000 SHGs and Joint Liability Groups, covering 5.8 million members, with an outstanding credit of `23,413 crore.

“The government-linked schemes are not peripheral but structural drivers of the bank’s lending portfolio, embedding social impact into its core operations,” Kumar says.

Financial inclusion for the bank extends beyond opening new accounts. “We are not only opening accounts but also enabling first-time borrowers and underserved customers to become active participants in the financial system,” Kumar says.

Social security enrolments include over 103,000 customers under PMJJBY, 216,000 under PMSBY and nearly 5 million under APY. The Business Correspondent network has expanded to more than 16,200 outlets, strengthening last-mile access.

The bank also invests in capability building. Through its training institutes, 36,528 rural youth were trained in FY25. Financial literacy camps have reached more than 1.2 million participants. “We measure social impact not just in terms of accounts opened or credit disbursed, but in livelihoods sustained, enterprises nurtured, and rural households empowered,” Kumar says.

The Road Ahead

The bank is targeting 10 to 12% credit growth in FY26, with priority sectors expected to contribute meaningfully.

The IND MSME Digi credit model sanctions loans up to `5 crore within 30 minutes. Now, new digital initiatives and women-focused schemes are being rolled out.

@neetu_csharma