CASA fo­cus

K Paul Thomas, MD and CEO, ESAF Small Fi­nance Bank, shares de­tails about CASA growth and ex­pan­sion plans:

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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

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