Digital disbursement of loans jumped twelve-fold between 2017 and 2020: RBI panel report

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A majority of loans disbursed digitally by NBFCs were personal loans, followed by loans classified as ‘others’. These primarily include consumer finance loans.

The overall volume of loan disbursements through the digital mode grew more than twelve-fold between 2017 and 2020 to Rs 1.42 lakh crore from Rs 11,671 crore, the Reserve Bank of India (RBI) working group on digital lending apps said in its report.

The panel’s findings were based on data received from a sample of lenders representing 75% and 10% of the total assets of banks and non-banking financial companies (NBFCs) respectively as on March 31, 2020. The report observed that lending through the digital mode relative to the physical mode is still at a nascent stage in case of banks (Rs 1.12 lakh crore via the digital mode vis-à-vis Rs 53.08 lakh crore via the physical mode). In case of NBFCs, a higher proportion of lending (Rs 0.23 lakh crore via the digital mode vis-à-vis Rs 1.93 lakh crore via the physical mode) is happening through the digital mode.

“In 2017, there was not much difference between banks (0.31%) and NBFCs (0.55%) in terms of the share of total amount of loan disbursed through digital mode whereas NBFCs were lagging in terms of total number of loans with a share of 0.68% vis-à-vis 1.43% for banks. Since then, NBFCs have made great strides in lending through digital mode,” the group said in the report.

Private sector banks and NBFCs with shares of 55% and 30% respectively, are the dominant entities in the digital lending ecosystem. The share of NBFCs rose to 30.3% in 2020 from 6.3% in 2017, indicating their increasing adoption of technological innovations, the report said. During the same period, public sector banks also increased their share significantly to 13.1% from 0.3%. The working group attributed the prominent role of NBFCs in fostering digital modes of lending to the flexible regulatory regime they are subjected to.

The major products disbursed digitally by banks were found to be personal loans, followed by small and medium enterprises (SME) loans. A few private sector banks and foreign banks are also offering buy now pay later (BNPL) loans through the digital route.

A majority of loans disbursed digitally by NBFCs were personal loans, followed by loans classified as ‘others’. These primarily include consumer finance loans. “Even though the amount disbursed under BNPL loans is only 0.73% (banks) and 2.07% (NBFCs) of the total amount disbursed, the volumes are quite significant indicating a large number of small size loans for consumption,” the report said.

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PMC Bank depositors with over Rs 5 lakh in deposits to get paid over 10 years

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Unity SFB shall have time up to 20 years from the appointed date to repay the amount received from DICGC towards payment to the insured depositors, which can be done in one installment or in several instalments.

The Reserve Bank of India (RBI) on Monday released the draft scheme for the amalgamation of Punjab and Maharashtra Co-operative (PMC) Bank with Unity Small Finance Bank (SFB). The scheme envisages a full payout for depositors with deposits of over Rs 5 lakh over a period of 10 years.

Unity SFB, promoted jointly by Centrum Financial Services and BharatPe owner Resilient Innovation, will have to transfer the amount received from the Deposit Insurance and Credit Guarantee Corporation (DICGC) to all eligible depositors of PMC Bank an amount equal to the balance in their deposit accounts up to Rs 5 lakh, within a 90-day period, as was notified by the DICGC in September.

For depositors who hold more than Rs 5 lakh in deposits, the payout for the additional amount will be made in a staggered manner. Up to Rs 50,000 will be paid over the next two years, up to another Rs 1 lakh after three years, up to Rs 3 lakh after four years, up to Rs 5.5 lakh after five years, and any remaining amount will be paid after 10 years.

After March 31, 2021, no further interest will be payable on the interest-bearing deposits of PMC Bank for a period of five years. In respect of balances in any current account or any other non-interest bearing account, no interest shall be payable to the account holders. Interest will accrue at the rate of 2.75% per annum shall be paid on the retail deposits of PMC Bank, which remain outstanding after the five year-period. This interest will be payable from the date after five years from the appointed date, or the date of notification of the scheme by the government.

As for institutional depositors, 80% of the uninsured deposits outstanding in various accounts to the credit of each institutional depositor of PMC Bank shall be converted into perpetual non-cumulative preference shares (PNCPS) of Unity SFB with a dividend of 1% per annum payable annually. After 10 years from the appointed date, the transferee bank may consider additional benefits for such PNCPS holders either in the form of providing a step up in the coupon rate or a call option, after taking the RBI’s approval.

The remaining 20% of the uninsured institutional deposits will be converted into equity warrants of Unity SFB at a price of one rupee per warrant. These equity warrants will further be converted into shares of Unity SFB at the time of the initial public offer (IPO) of the bank. The price for the conversion will be determined at the lower band of the IPO price.

In respect of every other liability of PMC Bank, Unity SFB shall pay only the principal amounts, as and when they fall due, to the creditors in terms of the agreements entered between them prior to the appointed date or the terms and conditions agreed upon.

Unity SFB shall have time up to 20 years from the appointed date to repay the amount received from DICGC towards payment to the insured depositors, which can be done in one installment or in several instalments. “The transferee bank shall create a reserve account in its books and make periodical transfers to it as may be approved by Reserve Bank, for the purpose of discharging its liability towards DICGC in accordance with the provisions of this Scheme,” the draft said.

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Cost of funds has not bottomed out, still room for lowering

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We have an adequate CRAR of 32-34% and we think we can leverage it more.

Manappuram Finance reported an 8.8% year-on-year decline in its consolidated net profit for the second quarter despite consolidated assets under management increasing 5.7% YoY to Rs 28,421.63 crore. VP Nandakumar, MD & CEO, talks to Rajesh Ravi on the company’s performance and future outlook. Excerpts:

Net profit has declined YoY despite AUM reporting an increase?

The loan portfolio declined during the first quarter and we started growing only after the first half of the second quarter. Secondly, we lowered our pricing when targeting large ticket sizes. Earlier, it was uniform pricing for all loans. To ensure sustained growth, we changed our strategy. Cost also increased as employees are back and travelling. We also increased our publicity expenses and incentives.

Do you mean that there will be margin compression going forward due to competition?

Competition is seen only in larger ticket sizes of Rs 5 lakh and above. We were losing in that segment due to competition. With the new pricing strategy, we are gaining ground, but our yield may come down by 2%. This will be compensated with higher branch efficiency. We have an adequate CRAR of 32-34% and we think we can leverage it more.

What is the outlook for the quarter and the fiscal?

We are giving guidance of 20% in AUM and 20% in Return on equity (ROE). The decline in profitability is a temporary phenomenon and our ROE may go slightly below 20% for a while before bouncing back. We aim not only for profitability but also growth and this ensures the sustainability of the company. Profitability will improve in one or two quarters.

NPA has increased during Q2.

NPA has moved up and we have provided for it in anticipation. There was no surprise. NPA will come down going forward.

How is new customer acquisition? There is a tight competition in the gold loan sector.

Demand is good and we are able to achieve growth every day due to the new strategy. The collection is also improving even in the non-gold sector. Acquisition of new customers is back to the pre-pandemic level.

What about the cost of funds? Do you feel that it has bottomed out?

No, it has not bottomed out. Still, there is room for lowering the cost of fund. Our legacy NCD cost is around 10%, while our average borrowing cost is below 8%. For incremental borrowing, our cost will come down further.

Average LTV of your gold loan portfolio?

The average LTV of our portfolio is 64% according to current gold price.

How are your non-gold businesses doing? Will the share of non-gold businesses increase in coming quarters?

In microfinance, collections are seen improving and it has reached 93% in Q2. It may touch 96% in Q3. The resilience of the microfinance industry is evident despite the pandemic. In one or two years, we may have to raise capital for growth. Some of the segments which we wish to grow are affordable home lending and commercial vehicle financing.

What about the expansion of branches?

We have given application for opening 100 new branches. We are strong in south, and there are ample opportunities in north, east and western parts of the country.

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Reserve Bank of India – Tenders

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The Pre-Bid meeting for the captioned tender was held on November 22, 2021 at 11.00 A.M in conference room, Estate Office, MRO. The meeting was attended by officials of Estate Department. Two firms participated in the pre-bid meeting namely –

a. M/s Kompress India Pvt Ltd

b. M/s Safeage Security Products Pvt Ltd

2. All the terms and conditions were explained to the firms and The following queries were raised by the participants and clarified:

Sl.No Query Raised Clarification
1. Whether MSME bidders are exempted from paying Earnest Money Deposit (EMD). MSEs are exempted from submission of EMD only in cases where the estimated cost of procurement (Goods, Services or Work Contracts) is upto Rs. 10 Lakh (including all taxes, duties etc.). In the extant case, the estimated cost of the tender is more than Rs. 10 lakh and therefore submission of EMD is compulsory.

3. Both the firms have agreed with the tender terms and conditions.The technical specifications have been explained to the tenderers and have understood the same and agreed in principle.The meeting ended with Thanks.

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2 Multibagger Penny Stocks That Delivered Up To 23,943% Return In 1-Year

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1. Tata Tele Business Services Limited:

This telecommunications stock on a YTD basis has generated return of 957 percent, while 1-year return comes in at . The price of the penny scrip just 6 months back as on May 22 was at a mere Rs. 12.5 per share, implying huge gains of 572% considering last traded price of Rs. 84.05 per share on the NSE. In an otherwise weak market, the scrip hit 52-week high price today (November 22, 2021) on Bharti Airtel’s announcement of new hiked tariff rates for prepaid connections.

Though the scrip saw intermittent correction and traded range bound between July to October, it again saw sharp momentum after this period.

In May this year, reports suggesting that Tata Sons will provide the necessary support system to revive Tata Tele and in the new form called Tata Tele Business Services (TTBS)- the company will extend services to SMEs, provided a boost to the company’s stock price. Importantly, the company’s retail mobile services were transferred to Bharti Airtel more than 2 years back in July 2019.

On November 10, 2021, the company clarified on price movement and said “…. we have always promptly intimated of any events, information, etc. required to be disclosed under Regulation 30 of the Sebi Regulations, 2015 and will continue to do so in future as and when any such event or information occurs in the Company. At this stage there is nothing further to disclose”.

Care Rating in its latest report reaffirm its rating on the company’s long and short term term bank facility etc. Also the continuing backing by Tata Sons- the company’s promoter suggests that it shall take all necessary steps to cover up any liquidity crisis for the following next year.

Tata Tele is a small cap company that offers an array of telephony services including mobile, fixed wireless phones (FWP), public telephone booths & wireline services. To cater to the Indian youth, the company offers services under the brand name Virgin Mobile.

2. Proseed India:

2. Proseed India:

From a price of Rs. 1.75 per share as on May 23, 2021 almost 6 months back, the scrip has climbed to a price of Rs. 84.15 currently. This amounts to a staggering 6-month return of 4709 percent. The stock’s YTD and 1-year return are 15,200 and 23,943 percent, respectively. The stock on October 10 hit a price of Rs. 156.55 and since then has been losing ground.

Note the gains in the stock price are not in sync with the company’s financials and this company is indeed a loss making entity. From last several quarters, the company is logging zero sales, while the last time it registered sales worth Rs. 0.54 crore was for the Q3 period of Fy19.

For the just concluded quarter, the company’s loss widened YoY to Rs. 0.46 crore as against Rs. 0.09 crore during the same period a year ago. Sequentially also the company’s net loss increased by a steep 53 percent. Major shareholding in the company is of 3 promoters who have 97 percent stake in the firm as at the end of the September quarter. For the last concluded Fy, the company registered a profit to the tune of 12.67 crore.

Proseed India underwent the corporate insolvency process (CIRP) under the Insolvency and Bankruptcy Code, following which the NCLT allowed for its resolution plan in December end.

Founded in 1991, the Hyderabad-Telangana based company formerly known as Green Fire Agri Commodities Limited is a leading Agri Bio Technology company. The company’s specialities are in the field of Agri-Biotechnology nurturing farming community for increasing yield potential of the crops.

Disclaimer:

Disclaimer:

The stocks discussed above are penny stocks that carry a higher risk and hence may even offer a higher reward. Nevertheless, the story above just points to the potential run up in these stocks that even contradicted their financials. Note readers should not construe it to be a call to buy the above listed stocks.

GoodReturns.in



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US Fed chief Powell gets second term

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The Federal Reserve Chair Jerome Powell was nominated for a second four-year term by President Joe Biden on Monday, extending a tenure that began somewhat by chance, survived blistering criticism from former President Donald Trump, and now positions the ex-investment banker to finish the most consequential revamp of monetary policy since the 1970s.

Lael Brainard, the Federal Reserve board member who was the other top candidate for the job, will be Vice-Chair, the White House said. Powell, 68, will need to be confirmed by the Senate, currently controlled by Biden’s Democratic party but closely divided.

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PMC’s 1,100 employees can heave a sigh of relief

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Scam-hit Punjab and Maharashtra Co-operative (PMC) Bank’s 1,100 odd employees will heave a sigh of relief as the draft scheme of amalgamation of their bank with Unity Small Finance Bank (Unity SFB) assures continuation of service for at least three years.

As per the scheme, all the employees of the transferor bank (PMC Bank) shall continue in service on the same remuneration and terms and conditions of service for a period of three years from the appointed date, as were applicable to such employees immediately before the close of business on the appointed date. PMC Bank’s employees are spread across 105 branches and the head office.

Unity SFB said, “…The Draft Scheme provides the much needed relief and clarity to over 1,100 PMC Bank employees, who will remain employed and continue uninterrupted service to clients.”

Key managerial personnel

However, the scheme says that transferee bank (Unity SFB) may discontinue the services of the key managerial personnel of the transferor bank (PMC Bank) after following the due procedure at any time, after the appointed date, as it deems necessary and providing them compensation as per the terms of their employment.

Unity SFB commenced operations as a small finance bank with effect from November 1, 2021.

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SBI dual lists $650 million green bonds on India INX, Luxembourg Stock Exchange

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State Bank of India, the country’s largest commercial bank, on Monday dual listed its $650 million green bonds simultaneously on the India International Exchange (India INX) and Luxembourg Stock Exchange (LuxSE). This dual listing is in line with this year’s topic of World Investor Week, ‘Sustainable Finance’, as indicated by the regulatory body International Financial Services Centres Authority (IFSCA).

India INX, which is BSE’s international arm, on Friday had announced its memorandum of understanding with Luxembourg Stock Exchange for co-operation in financial services industry, maintenance of orderly markets in securities respective country, ESG (environmental, social and governance) and green finance in the local market. This dual listing of green bonds is the first step towards this collaborated effort.

Commenting on the dual listing, V Balasubramaniam, MD and CEO, India INX, said, “With this dual listing, we have taken the first step towards our association with LuxSE with a mutual goal of deeply benefiting the investors and issuers at large. On this special occasion of World Investor Week, we are focusing on the theme of sustainable finance and this listing of green bonds by SBI is very important move towards that goal.”

Automatic qualification

He said that India INX will work towards establishing a green corridor with Luxembourg to enable Indian Issuers to automatically qualify for dual listing with LuxSE to get investors from Europe and the globe. “India INX has now emerged as the leading bond listing venue with over $33 billion dollars listing,” he added.

Manoj Kumar, Executive Director, IFSCA, said, “The dual listing of SBI bonds is an important step for IFSCA in demonstrating regulatory convergence with the leading international markets of Luxembourg, which has the largest green bond listings in the world. This will pave way for Indian and European issuers to explore IFSC as a hub for issuance of green and sustainable bonds. On the occasion of World Investor week, themed around sustainable finance, the dual listing will also enhance international investors’ confidence in sustainable products listed at IFSC.”

Ashwini Kumar Tewari, Managing Director of SBI, said, “State Bank has raised $800 million in the green bond market so far. The listing of green bond with LuxSE will open up new avenues for market development and fund raising opportunities in the green bond space.”

Tewari highlighted that SBI has been the first public sector bank in India to publish its sustainability report as per Global Reporting Initiative (GRI) framework. In 2019, India INX had unveiled GSM Green, a platform for fund raising and trading in green, social and sustainable bonds exclusively. The platform is established as per ICMA’s Green Bond Principles and Climate Bonds Initiative which provides an ideal platform for global investors to invest.

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Reserve Bank of India – Tenders

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1. Online Tenders by E-Tendering process are invited for the above work in the Bank’s residential colony at Hauz Khas, New Delhi. The work is estimated to cost of ₹30 Lakh and is to be completed within three months.

2. All the Pre-Qualification papers shall be uploaded on MSTC site. Same will be downloaded after bid opening date for examination by the Bank.

3. The Earnest Money Deposit (EMD) in the form of DD/Irrevocable Bank Guarantee/proof of paid by NEFT shall be submitted in sealed cover addressed by name Shri Vivek Aggarwal, Regional Director, Reserve Bank of India, Estate Department, Main Office Building, 6 Sansad Marg, New Delhi 110001 so as to reach up to 14.00 Hrs on December 23, 2021 superscripted as “EMD for DSITC of roof top grid interactive SPV based solar power plant in the Bank’s residential colony at Hauz Khas, New Delhi.”

4. Online tenders will be allowed to view /download to all firms from 16.00 Hrs on November 22, 2021. The firms which do not comply with the following pre-qualification criteria and do not submit EMD, will not be considered for opening of their tender Part-II.

i. The intending tenderer must have minimum 5 years of experience in carrying out grid interactive solar power system installation works for office buildings/commercial premises. The similar work* should have been completed on or after October 31, 2016.

ii. The intending tenderer must and have executed successfully similar works*, during last five years ending on October 31, 2021 as under:

(a) Three works each costing not less than the amount equal to 40% of the estimated cost

OR

(b) Two works each costing not less than the amount equal to 50% of the estimated cost

OR

(c) One work costing not less than the amount equal to 80% of the estimated cost.

iii. Minimum yearly turnover of 100% of the estimated cost during last 3 financial years supported by audited financial statements.

iv. Should have service setup in Delhi NCR for rendering after sales service.

*Similar Works means – works of Design, Supply, Installation, Testing and Commissioning of grid interactive SPV based Solar Power System.

5. The contractors shall upload the following information/documents on MSTC site to satisfy the Bank about their eligibility

(a) Composition of the firm Full particulars (whether contractor is an individual, or a partnership firm, or a company etc.,) of the composition of the firm of contractors in details should be submitted along with name(s) and address (es), of the partner’s copy of the Articles of Association/ Power of Attorney/other relevant document.
(b) Work experience & Completion of similar works of specified value during the specified period Copies of the detailed work orders for the qualifying works (4(i) and 4(ii) above) indicating date of award, value of awarded work, time given for completing the work, etc. and the corresponding completion certificates indicating actual date of completion and actual value of executed similar works should be enclosed in proof of the work experience. The details along with documentary evidence of previous experience, if any, of carrying out works for the Reserve Bank of India at any Centre, should also be given.
(c) Turnover Audited financial statements for last three financial years i.e. 2018-19, 2019-20 and 2020-21 along with a certificate of Chartered Accountant indicating the turnover for these financial years.
(d) Credit worthiness of the contractor and their turnover during the specified period Copies of the Income Tax Clearance Certificates/Income Tax Assessment Orders along with the latest final accounts of the business of the contractor duly certified by a Chartered Accountant should be enclosed in proof of their creditworthiness and turnover for last three years.
(e) Name(s) and address(es) of the Bankers and their present contact executives Written Information about the names and addresses of their bankers along with full details, like names, postal addresses, e-mail IDs, telephone (landline and mobile) nos., fax nos., etc. of the contact executives (i.e. the persons who can be contacted at the office of their bankers by the Bank, in case it is so needed) should be furnished.
(f) Details of bank accounts Full particulars of their bank accounts, like account no. type, when opened etc., should be given.
(g) Name(s) and address(es) of the Clients and their present contact executives Written information about the names and addresses of their clients along with full details, like names, postal addresses, e-mail IDs, telephone (landline and mobile) nos., fax nos. etc., of the contact executives (i.e. the persons who can be contacted at the office of their clients by the Bank in case it is so needed) should be furnished.
(h) Details of completed works The client-wise names of work(s), year(s) of execution of work (s), awarded and actual cost (s) of executed work (s), completion time stipulated in the contract (s) and actual time taken to complete the work (s), Name(s) and full contact-details of the officers/authorities/departments under whom the work(s) was/were executed should be furnished.
(i) Details of Service setup Address and contact details of the service set up at the place of proposed work or nearby metro for rendering after sales service.

6. In the event of intending tenderer’s failure to satisfy the Bank; the Bank reserves the right to refuse to participate in tendering process

7. The duly filled in tender documents shall be uploaded on MSTC site till 14.00 Hrs on December 23, 2021 (a) Tender forms can be downloaded for viewing from the website www.mstcecommerce.com w.e.f. 16.00 Hrs on November 22, 2021.

(b) EMD of ₹ 60,000/- (Rupees Sixty thousand only) in the form of Demand Draft favouring Reserve Bank of India payable at New Delhi/ NEFT as per details in Annexure-J or an irrevocable Bank Guarantee issued by a scheduled Bank in the Bank’s standard proforma which is available in the tender form (Annexure-H)

(c) Tenderers shall submit all the information and the documents as mentioned in Para 5 above.

After examination, if any of the tenderer is not found to possess the required eligibility, their tenders will not be accepted by the Bank for further processing.

8. Part I of the tenders will be opened on-line at 15.00 Hrs on December 23, 2021 in the presence of the authorized representative of the tenderers who choose to be present. Part-II (Price bid) shall be opened of the eligible tenderer on a subsequent date which will be intimated to the tenderers in advance.

9. The applicants/tenderers have to submit/upload

  1. Client’s certificate as per format at Annexure-L from their clients for whom they have carried out “eligible works” in terms of the eligibility (Pre-qualification) criteria explained in this notice.

  2. Banker’s certificate as per format at Annexure-K from their banker/s.

The client’s certificate shall be accepted only when the same is signed by an official of the rank of Executive engineer/Superintendent Engineer or equivalent in respect of a Government/Semi Government organization or a PSU and only when they are supported by adequate proof of payment received by the contractor for the work done by him. The client’s certificate issued by the private organizations shall also accompany Tax Deducted at Source (TDS) certificates. Applications/tenders uploaded without the above certificates may be rejected. The Bank shall have the right to independently verify these certificates.

The Bank shall evaluate the said reports before opening of price bid of the tenders. If any tenderer is not found to possess the required eligibility for participating in the tendering process at any point of time and/or his performance reports received from his clients and/or his bankers are found unsatisfactory, the Bank reserves the right to reject his offer even after opening of Part-I of the tender. The Bank is not bound to assign any reason for doing so.

10. The Bank is not bound to accept the lowest tender and reserves the right to accept either in full or in part any tender. The Bank also reserves the right to reject all the tenders without assigning any reason there for.

Regional Director

New Delhi
22.11.2021

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Tech and digital will be major enablers for our business: Poonawalla Fincorp

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Poonawalla Fincorp believes tech and digital will be key enablers for its business and it is looking at providing end-to-end digital journey to its customers. In an interview with BusinessLine, Vijay Deshwal, Group Chief Executive Officer, Poonawalla Fincorp, spoke about the company’s strategy since the deal with Magma and how it plans to diversify products and rationalise branches. Excerpts:

How has the business been operating since the Magma deal?

The last four to five months have been a phase of consolidation and transformation, where we realigned our business mix towards highly scalable products, targeting formal credit-tested borrowers with increasing play on salaried and professional individuals. We have a very highly ambitious plan of growing with a focus on generating operating profits and keeping credit costs well within predefined limits. To achieve this, we have identified five core operating levers — brand and equity capital coupled with our cost of funds. We have already achieved a significant repricing of our existing debt and raising fresh debt at very fine rates. The third lever is a very strong senior leadership team; the fourth lever is our distribution and collection infrastructure and the fifth lever will be our digital strategy.

What will be your digital strategy?

We will look at tech and digital as major enablers for doing business. For each one of the businesses, our ambition will be that we have an end-to-end digital journey for our customers. We will use analytics as a very potent tool for sourcing, credit underwriting and risk monitoring. We will focus on the credit costs, right from the time of onboarding of customers and maintain them within the predefined parameters.

What are the products that you are diversifying into?

We have rolled out personal loans and loans to professional business. We have started SME loans against property last month.

The small ticket LAP will be rolled out in the next quarter. Co lending and fintech partnerships are on. Pre-owned car finance is also there and we have a very good affordable home loans franchise. These will be our focus segments. We are also at the advanced stages of launching medical equipment loan franchise, small ticket loan against property, and a few co-lending and fintech partnerships.

Apart from the pre-owned car finance partnership with CARS24, are you looking at such partnerships for other product lines?

We have been into pre-owned car finance.

However, tech and digital are at the front of all our value propositions and which not only offers frictionless delivery of financial services but also reduces the cost of acquisition and opex. Fintechs are playing a complementary role in the financial supply chains. In addition to our physical distribution infrastructure, which we already have in place for pre-owned car finance and other products, we are actively looking at harnessing such partnership ecosystems.

What about branch expansion?

We inherited 290 branches. We are looking at branch rationalisation rather than branch increase or branch decrease.

Some branches will be shut where the product focus is not there or those which have not been profitable. We are looking at strengthening our presence in some markets like Tamil Nadu, Maharashtra and Gujarat where our branch penetration was not so adequate.

The overall business outlook seems to be very encouraging if we look at all the high frequency indicators like GST collections, the commercial vehicle sales and the push for online payments. We believe that we are up for a good business cycle in the coming years. The recent few months have also provided a huge amount of market opportunity across the products that we have identified and our business also has been responding quite well to these market opportunities.

Is stress on your books a concern?

Not at all. We took a few prudent measures at the beginning of this financial year where we revised our write-off policies more to actually align with the real credit costs that the product lines bring and also took prudent management provisions to take care of any unforeseen events. We don’t see any sort of negative surprises in the near to long term.

Are you looking at further capital raise?

We received very large capital infusion by way of this (Magma) transaction. We are not looking at a capital raise at least for the next three to four years. We are sufficiently capitalised to grow our businesses in the near term.

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