K Paul Thomas, MD and CEO, ESAF Small Finance Bank, shares details about CASA growth and expansion plans:
ESAF Small Finance Bank, which began operations in March 2017, saw an over threefold jump in its net profit to `90 crore in 2018-19. The bank has recorded a whopping 234 % increase in its net profits for the FY19. High interest income and efficient non-performing asset (NPA) management contributed to the growth of the bank.
The bank has 424 banking outlets and 213 ATMs across 14 states with a client base of 3.3 million. It has a capital base of `8.93 billion and it employs more than 2000 people. The bank has taken special initiatives to promote CASA products.
Ravi Lalwani: What is the demand for CASA products among your customers? What are the customer trends?
K. Paul Thomas: Our CASA balances are on an upward trend across various states. As a bank catering to various customer segments and with rapid branch expansion plans, we do not anticipate any decline in CASA.
Among which customer segments is your CASA growing and among which customer segments is it declining? What could be the explanations for this?
We area relatively new bank, introducing various products and services across geographies. We are also expanding the branch network; thus, we see growth in every segment. As a bank we have given special focus to providing financial services to the unbanked and underbanked segments of the population, also the senior citizen segment. A substantial size of our liability business also comes from the age group of 20 to 40 years, all these segments are growing at a good rate.
What new features/facilities have you added for CASA customers in the last 12
months? What new is in the pipeline?
Over the past 12 months we have integrated with BHIM/UPI for facilitating remittances within India for our customers. We have also tied up with a payment gateway to facilitate utility and other payments for CASA customers. A platinum debit card has been launched and several variants of savings accounts are planned. A savings account for farmers was launched called ‘Krishak Bandhu’. We launched services to NRI segment and have tied up for inward remittance facilities with exchange houses to facilitate remittances from NRIs.
We are now in the merchant acquiring business, partnering with well-known agencies for installation of Point of Sale machines in various shops and other outlets. This will help our current account customers to accept payments by credit/ debit/prepaid cards.
We have also introduced corporate internet banking facilities for our corporate and other current account segments. We were the first small finance bank in the country to install robot in a bank branch ‘EIDA’ is a robot which can answer customer queries and guide customers to various departments in a branch.
Our customers can also now utilise the Bharat Bill Payment System using internet banking to facilitate payment of bills without prior registration with biller.
How have you modified your CASA marketing techniques? How effective are the new techniques compared to expectations?
We have designed our CASA products as affordable to all segments of the population. As a part of our intention to provide ‘Joy of banking for all’, we have waived services charges or have very low service charges. At the same our balance requirements in CASA accounts are very reasonable. This has positioned us as a bank which is for all persons. At the same time, we offer competitive interest rates on our SB accounts.
We have close to 1600 employees in branches and they are our most potent marketing force as each of them meet at least 5 people every day. Our business correspondents also are active marketers for our CASA products. Both these channels continue to be very effective.
What is the impact of slowdown on your bank? What are your expansion plans for 2020?
Despite a slowdown i n internal consumptions, declining investments and changing macro situations, we were able to improve upon our own benchmarks of performance.
The higher asset quality and higher interest returns contributed to the growth of bottom lines. There are growth aspirations in rural India, which are prompting us to further expand our reach especially in the unbanked sections and geographies. Our total branch network will cross 500 mark by 2020.
K Paul Thomas