RBL Bank’s ad­vances spring up 39%

RBL Bank saw a 39% growth in ad­vances and the bank has been fo­cus­ing on re­tail seg­ment

Banking Frontiers - - Hihglights - Me­hul@bank­ingfron­tiers.com

RBL Bank saw a 39% growth in ad­vances and the bank has been fo­cus­ing on re­tail seg­ment

RBL Bank has recorded a 39% yoy growth in its ad­vances book in 201617 with ad­vances touch­ing `30,000 crore. The non-whole­sale ad­vances con­sti­tute ap­prox­i­mately 40% of the to­tal ad­vances and con­tin­ues to grow at a rapid rate. The bank added more than 4 lakh new loan cus­tomers in this seg­ment and An­shul Swami, head, Fi­nan­cial In­clu­sion, Re­tail & MSME Lend­ing Prod­ucts of the bank, ex­plains: “This gran­u­lar growth came from re­tail, MSME and our fi­nan­cial in­clu­sion cus­tomer seg­ments. We also added 1.5 lakh credit card cus­tomers.”

Swami said the Branch & Busi­ness Bank­ing busi­ness of the bank grew by 55% across all prod­uct cat­e­gories, pri­mar­ily driven by loans against prop­er­ties and busi­ness loans. “This seg­ment con­sists of per­sonal loans and credit cards to the salaried seg­ment and on the busi­ness side the whole gamut of LAP, busi­ness loans, over­drafts, etc. The book has a healthy 75:25 se­cured: unsecured mix,” adds Swami.


In the pre­vi­ous year, the bank’s fo­cus was to lay the foun­da­tion for growth by fo­cus­ing on dis­tri­bu­tion, un­der­writ­ing ca­pa­bil­i­ties and build­ing part­ner­ships. This year, it has con­tin­ued to build its dis­tri­bu­tion net­work, which grew from 197 to 239 branches and from 310 to 550 BC branches. These BC branches are ex­clu­sively co-branded for RBL and ac­cord­ing to Swami, they help lever­age the bank’s re­la­tion­ship with cus­tomers for dis­tribut­ing other bank prod­ucts, in­clud­ing open­ing and ser­vic­ing bank ac­counts. “Our book is evenly dis­trib­uted over the north, west and south ge­ogra­phies and we con­tinue to see sim­i­lar growth rates across these re­gions,” says Swami.


RBL Bank con­tin­ues to be pri­or­ity sec­tor lend­ing pos­i­tive given its fo­cus on the agri and MSME busi­ness seg­ments and the un­der-banked fi­nan­cial in­clu­sion space. Swami says aside from the `2000 crore agri book, the bank has around 1/3 of lend­ing in the fi­nan­cial in­clu­sion space, which is for agri­cul­tural use. “These two busi­nesses are aligned with the gov­ern­ment’s de­vel­op­ment agenda and is also com­mer­cially vi­able de­liv­er­ing a good risk ad­justed re­turn for the bank. Aside from that, more than 70% of the BBB book is qual­i­fied un­der pri­or­ity sec­tor lend­ing,” says he.

The bank’s MSME busi­ness grew by 132% with its fo­cus on reach­ing out to the mi­cro and small busi­nesses. This is in line with the bank’s ob­jec­tive to pro­vide mass bank­ing ser­vices to small and mi­cro busi­ness seg­ments. Says Swami: “Our fi­nan­cial in­clu­sion fran­chise con­tin­ues to grow at a healthy rate and through our BC part­ners, we de­liv­ered a 46% yoy growth in this seg­ment.”


Home loans are en­cour­ag­ing busi­ness for the banks. RBL Bank has a `200 crore home loan book. Swami says it has been a com­bi­na­tion of Royal Bank of Scot­land (RBS) home loan book, which RBL Bank bought, and some other loans from its tra­di­tional mar­kets. “We do home loans through HDFC, our part­ner, given our base rate/MCLR is much higher than the mar­ket rates,” he adds.


As part of its fi­nan­cial in­clu­sion strat­egy, the bank sees af­ford­able housing as an at­trac­tive busi­ness propo­si­tion and it is eval­u­at­ing var­i­ous steps to en­ter into this mar­ket. The sec­tor is show­ing rapid growth and there is a huge de­mand-sup­ply gap. The gov­ern­ment is also fo­cus­ing on this seg­ment through in­ter­est sub­sidy as in­cen­tives. Says Swami: “We are look­ing to build an af­ford­able housing book driven through a model, which works pri­mar­ily on cap­tive sourc­ing along with de­vel­oper part­ners at one end of the spec­trum and of­fer­ing the same propo­si­tion to fi­nan­cial in­clu­sion cus­tomer base across the coun­try through our BC part­ners.”

An­shul Swami af­firms that home loans are en­cour­ag­ing busi­ness for the banks

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