Ensure Cash At Border Branches, ATMs, Strengthen Cybersecurity: RBI, DFS Tell Bank Of India

The Department of Financial Services and the Reserve Bank of India has advised Bank of India to keep adequate cash at border branches and ATMs, and strengthen cybersecurity, said Rajneesh Karnatak, the managing director and chief executive officer of the lender.

The advisory comes amid the escalating tensions between India and Pakistan.

Karnatak said that the state-owned bank has invoked business contingency plans for border branches over the last 5-6 days in view of the prevailing tensions.

“With respect to cybersecurity threat, lot of advisories are coming in from the RBI…we are adhering to these guidelines. We have 24x7 resiliency centre operating and already put a BCP (business contingency planning) in place,” Karnatak said at Q4 earnings conference on Friday.

Speaking to reporters on the sidelines, he said that the bank has issued instructions to branches located in border areas of Jammu & Kashmir, Gujarat, Rajasthan, Punjab to keep adequate cash at ATM and branches.

When asked about the spike in cash withdrawals, he said that the bank has not witnessed that at border branches yet.

“The operation of this business contingency plan is happening at a senior level and we are escalating the matter with whole-time directors, executive directors and myself. We are very much on the job,” he said, during the press conference.

Also, on Friday, Finance Minister Nirmala Sitharaman chaired a meeting to review banking sector's operational and cybersecurity preparedness, including digital applications such as internet banking and UPI.

The meeting came a day after India intercepted multiple drones and missiles launched from Pakistan on Thursday night, targeting military sites in Jammu, Pathankot, Udhampur and Amritsar. This escalation bid followed Operation Sindoor on Wednesday, in which Indian armed forces neutralised terror targets in Pakistan and Pakistan-occupied-Kashmir.

On the bank’s business, Karnatak said that he expects BOI’s global loan growth at 12-13% and deposit growth at 11-12% in the current financial year.

For the year ended March, the public sector bank’s global loan book grew 13.7% on-year to Rs 6.66 lakh crore and deposits grew 10.7% on-year to Rs 8.16 lakh crore.

On corporate loans, he said that the bank has a loan pipeline of Rs 60,000 crore, which constitutes to about 9% of its global loan book.

The bank expects to fund data centres, EV market and power sector. Renewable energy space remains a key focus area for the bank, he said.

The lender's corporate loan book rose 9.6% on-year to Rs 2.40 lakh crore. Karnatak said that the bank is lending to corporates with 'A and above' rating and in 'A and below' rated firms in manufacturing sector.

When asked about the bank’s outlook on margins, he expects the NIM at around 2.75% in fiscal 2026, and said that it could fall 20 basis points if the RBI cuts repo rate by 50 bps.

For the quarter ended March, NIM was at 2.61% from 2.80% in the prior quarter.

This is because 53-54% of the bank’s loan book is linked to external benchmark lending rate and 29% to marginal cost of lending rate.

While the bank expects its slippage ratio at 1% in fiscal 2026, he expects the resolution plan on one large NPA corporate account to come in the current financial year. The corporate account is of MTNL and the bank has about Rs 1,000-crore exposure towards the beleaguered telecom player.