Indian Bank may be raising additional funds for the coming quarter, with the Board set to meet on March 18 to consider this issue.

For its most recent Q3 quarter Indian Bank's domestic gross advances had shrunk by 0.1% YoY, and 0.3% QoQ to Rs. 1.26 trillion. Asset quality for the bank has deteriorated, with GNPA increasing by 41bps QoQ to 7.6%, and its NNPA increasing by 14bps QoQ to 4.7%. 

The commercial segment of the bank's domestic loan mix has also fallen sharply, shrinking 7% YoY. Bank management said it planned to focus on SME segments to push growth. 

While the SME segment is relatively untapped, it is notoriously hard to target and sell to, particularly since small businesses have been struggling since demonetization. This and the slowdown in credit growth overall in the banking sector is likely pushing the mid-size Indian Bank to look at raising funds.