Equitas Small Finance Bank become the 99th Direct
Live Member on NPCI’s National Financial Switch. Last month, it started to
issue RuPay Debit Cards to its SFB Account Holders. Initially, two variants of
RuPay Debit Cards (Classic + Platinum) are being offered.
Equitas YouTube Video 1
In September 2016, Equitas Small
Finance Bank has commenced its banking operations with 3 branches in Chennai.
Equitas YouTube Video 2
Equitas Holidings was one of the 10 companies
to receive the ‘in-principle’ approval from Reserve Bank of India to set up.
The in-principle approval given in September 2015 and the applicants had 18 months to comply with the requirements.
The companies which received the ‘in-principle’,
approval were Au Financiers (India) Ltd., Jaipur, Capital Local Area Bank Ltd.,
Jalandhar, Disha Microfin Pvt., Ahmedabad and Utkarsh Micro Finance Pvt.
Varanasi, Equitas Holdings Pvt., Chennai, ESAF Microfinance and Investments
Pvt., Chennai, Janalakshmi Financial Services Pvt., Bengaluru and Ujjivan
Financial Services Pvt., Bengaluru. The RBI also granted permission for RGVN
(North East) and Microfinance Ltd., Guwahati, and the Navi Mumbai-based
Suryoday Micro Finance Pvt.
Equitas Holdings received the final approval from Reserve Bank
of India, in June 2016. Based on the
final Reserve Bank of India, Equitas top
management planned the initial roll-out
in September or October 2016.
Equitas would be the first bank after indepedence from Tamil
Nadu and first private bank from Chennai.
In the initial years, Equitas Small Finance Bank would incur
an additional expenses of INR100 crores. The additional expenditure is towards
onboarding employees and relocation of its branches.
In mid 2016, Equitas had around 9,000 employees of which only three are
employed to get money, while balance are in lending and collection.
As the new SFB needs to focus on liability,
it needs to add another 3,000 people. This alone would cost around Rs 80-90
crore every year.
The second major cost would be increase in
rent as Equitas need to relocate around 400 branches.
Of the little over 580 branches of Equitas,
currently around 410 will be converted into full-fledged SFB branches, while
the balance will be specialised branches, which will focus on lending.
Almost 400 of these branches are located
inside the lanes or on the second or third floors of a building, which will NOT
work for a bank, as Bank branches need
to be on the ground floor and on the main roads.
Of the total branches around 50% of it are
in South, in West around 30% and balance are in North.
The new SFB will focus on four key strategies
including offering existing range of credit products such as micro-finance,
small enterprise loans, business banking loans for tiny to small commercial
establishments, commercial vehicle finance and affordable housing finance.
Additionally, the SFB would be looking to
offer a few cross sell products such as loan against gold, etc.
Equitas plans to offers multiple channels to clients
to access their accounts with the bank including digital channels such as net
banking and mobile banking, offer third party products and services such as
insurance, pension and 3-in-1 accounts to enhance the value to clients. The
company invested around Rs 20-25 crore in IT infrastructure.
To enable physical support to its millions
of customers, Equitas plans to have a net work of Business Correspondents (BC)
at branch level taking banking services right to the doorstep of its clients.
Equitas hopes to improve its operational
efficiency and risk management through technology-enabled operating procedures
which would help in reducing cost to borrowers over time.
The Chennai-headquartered Small Finance
Bank, in a statement, said by the end of fiscal FY16-17, it plans to have a
network of 412 branches spread across 11 states.
Of these 412 branches, Equitas plans to
have 50 per cent in South, 30 per cent in West and the remaining 20 per cent in
North. About 25 per cent of bank branches will be located in rural, unbanked
villages.
Currently, the bank has advances of about
Rs. 6,500 crore, of which about 50 per cent is microfinance, about 25 per cent
is used commercial vehicle finance and the remaining in micro and small
enterprises and affordable housing finance.
PN Vasudevan, Managing Director & CEO,
Equitas Small Finance Bank Limited, said: “It is our endeavour to bring a wave
of freshness into banking through our focus on making normal banking
transaction `Fun’ for the customers and through spreading fun and joy, we hope
to impact about 5 per cent of Indian Households by 2025. “
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