Page 7 - Banking Finance November 2025

BANK UPDATE

1.32% and Return on Equity (ROE) at global NIM stood at 3.21%. The bank roll out a new system from October 4,
19.58%. also reduced its cost-to-income ratio by 2025, that will clear cheques on the
MD and CEO Binod Kumar highlighted 321 basis points to 45.76%, showcas- same day they are deposited, reducing
improved efficiency, with yield on ad- ing improved operational efficiency. the traditional 1-2 day waiting
vances at 8.4% and cost of deposits Key profitability indicators strength- period. Cheques will now be processed
falling to 5.01%. The bank's strong fun- ened with Return on Assets (ROA) ris- continuously during business hours un-
damentals position it well for sustained ing to 1.20% and Return on Equity der the Cheque Truncation System
growth amid a stable credit environ- (ROE) to 19.95%. Total business grew (CTS).
ment. 14.10% YoY to Rs. 6.17 lakh crore, with The existing batch-based CTS system
deposits at Rs. 3.39 lakh crore and will be replaced with "Continuous
Indian Overseas Bank advances at Rs. 2.78 lakh crore. Clearing and Settlement on
posts record Rs. 1,226 The Credit to Deposit ratio rose to Realisation", improving speed, reduc-
81.98%, and CASA deposits increased ing settlement risks, and enhancing
crore profit in Q2 by 4.19% to Rs. 1.37 lakh crore, main- customer convenience. In its official
Indian Overseas Bank (IOB) recorded a taining a CASA ratio of 40.52%. The circular, the RBI confirmed the transi-
net profit of Rs. 1,226 crore in Q2 performance reflects IOB's successful tion will happen in two phases: Phase
FY26, marking a 57.79% year-on-year turnaround and continued focus on 1 on October 4, 2025, and Phase 2 on
rise - the highest-ever quarterly profit high-quality credit and profitability. January 3, 2026.
for the lender. The bank's operating
profit rose 12.78% to Rs. 2,400 crore, Same-day cheque clear- This upgrade will allow cheques to be
backed by a 20.53% growth in Net In- scanned and presented electronically
terest Income (NII) at Rs. 3,059 crore. ance from October 4 un- and passed for settlement within a few
IOB's domestic Net Interest Margin der RBI's new plan hours, offering near real-time clearing
(NIM) improved to 3.35%, while the The Reserve Bank of India (RBI) will during working hours. The change is
part of RBI's broader effort to
modernise India's payment systems,
Cheque delays disrupt businesses despite RBI's aligning cheque-based payments
same-day clearing move more closely with instant digital

Despite the Reserve Bank of India's (RBI) launch of same-day cheque clear- methods like UPI.
ance on October 4, customers and businesses are experiencing delays of up The move is expected to especially
to five days, similar to timelines before the new system. MSMEs have raised benefit businesses and retail customers
concerns, noting operational disruptions due to software readiness issues in who rely on cheques for high-value
banks. transactions.

Federation of Telangana Chambers of Commerce and Industry President
Rachakonda Ravi Kumar highlighted that many MSMEs still depend on Join
cheques, and delayed clearance can impact credit scores. Customers across
states are facing similar problems, and even banks like SBI, Canara Bank, Online Certificate Course on
and Union Bank have admitted to software-related hurdles.
Artificial
A senior Delhi banker confirmed backlog issues, citing cheques pending since
October 9. Legal expert VT Gokhale shared a personal case where a cheque
took six days to clear. Intelligence in
The RBI, along with the National Payments Corporation of India (NPCI), is Insurance
monitoring the situation. NPCI said over 1.49 crore instruments worth Rs.
8.49 lakh crore have been processed so far, and most initial glitches have
For details please visit
now been addressed. Remaining issues are being resolved with individual
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BANKING FINANCE | NOVEMBER | 2025 | 7