Suryoday SFB to discontinue ATMs from October 1

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Suryoday Small Finance Bank has decided to discontinue its ATMs from October 1.

“Due to operational reasons, Suryoday Bank ATMs will be discontinued with effect from October 1, 2021,” the bank has said on its website.

Customers can use their Suryoday Bank debit cards at ATMs of any other banks to withdraw cash, it further said. For other banking services, customers can use Internet and Mobile Banking services.

Suryoday SFB has become the first lender to discontinue ATM services.

According to RBI data, it had 25 on-site and 1 off-site ATM and 2.8 lakh debit cards by July end 2021.

Many banks have been facing challenges in operating ATMs due to high operational costs.

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All you need to know about Suryoday SFB IPO, BFSI News, ET BFSI

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The Suryoday Small Finance Bank IPO is now open and live till March 19, with a price band of ₹303-305. Each lot consists of 49 shares. A total of 1.9 crore shares are available for subscription in the IPO. 50% of the issue is reserved for qualified institutional buyers (QIB), 15% for non-institutional bidders and the remaining 35% for retail investors. Employees of the bank will have 5 lakh shares reserved for them, issued at a discount of Rs 30 per share.

The bank is among the leading SFBs in India in terms of Net Interest Margins, Return on Assets, Yields and deposit growth and had the lowest Cost-to-Income ratio among SFBs in India in Fiscal 2020.

Suryoday SFB‘s purpose against launching its IPO
The proceeds of the IPO are proposed to be used for boosting the bank’s Tier-1 capital base to meet future capital requirements. Tier-1 capital refers to the core capital of a bank that consists of equity shares and retained earnings.

According to the bank’s red herring prospectus, the fund-raising will help Suryoday Small Finance Bank to augment its capital base. As of December 31, the bank’s capital adequacy ratio stood at 41.17%, where Tier-1 capital constituted 34.3% reported by The Quint.

Further, small finance banks are required to list within three years of reaching a net worth of Rs 500 crore, as per the Reserve Bank of India (RBI) guidelines governing these lenders. The bank had crossed the milestone in November 2017, making it necessary to list by November 2020.

The bank had applied to the RBI for an extension of timeline for listing till May 31, 2021. However, the RBI rejected the request and asked it to complete its listing at the earliest, according to the prospectus.

Business of Suryoday Small Finance Bank
SSFB received the small finance bank licence from the RBI in 2016. Prior to that SSFB operated as a NBFC and offered small ticket-size loans to women from weaker sections of the society. SSFB serves customers in the unbanked and underbanked categories. It has been serving these segments for over a decade now

SSFB currently provides a wide range of products and services, including housing loans, commercial vehicle loans, micro business loans, unsecured micro and small enterprise loans, among others.

As of December 31, 2020, SSFB’s customer base was 1.44 million and its employee base comprised 4,770 employees and it operated 554 Banking Outlets including 153 Unbanked Rural Centres.



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Suryoday SFB IPO to open on March 17

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Suryoday Small Finance Bank is set to launch its initial public offering on March 17 and looks to raise about Rs 580 crore. The issue will close on March 19.

“The IPO will help the bank comply with the regulatory guidelines of the Reserve Bank of India for the listing of small finance banks within three years of their net worth reaching ₹500 crore, and also help raise enough primary capital to further enhance our capital base,” said R Baskar Babu, Managing Director and CEO, Suryoday SFB on Friday.

“The price band of the offer has been fixed at ₹303 to ₹305 per equity share,” the bank said in a statement, adding that it proposes to use the net proceeds from the fresh issue towards augmenting Tier – 1 capital base to meet its future capital requirements.

The issue comprises a fresh issue of up to 81.5 lakh equity shares and an offer for sale of up to 1.09 crore equity shares.

The bank has undertaken a pre-IPO placement of 52.08 lakh equity shares.

The offer for sale includes up to 43.87 lakh shares by International Finance Corporation, up to 20.21 lakh shares by Gaja Capital Fund II, up to 18.89 lakh shares by DWM (International) Mauritius, up to 7.5 lakh shares by HDFC Holdings, up to 15 lakh shares by IDFC First Bank, up to 1 lakh shares by Americorp Ventures, up to 1.86 lakh shares by Kotak Mahindra Life Insurance and up to 1.06 lakh shares by Gaja Capital India AIF Trust (represented by its trustee, Gaja Trustee Company).

The issue includes a reservation of up to five lakh shares (constituting up to 0.47 per cent of the post-Issue paid-up equity share capital), for subscription by eligible employees, who may be given a discount of up to 10 per cent of the issue price.

“Bids can be made for a minimum of 49 equity shares and in multiples of 49 equity shares thereafter,” the statement said.

Axis Capital, ICICI Securities, IIFL Securities and SBI Capital Markets are the Book Running Lead Managers to the issue

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