Apache is functioning normally

How has been your bank’s collection efficiency?

A majority of borrowers who were stressed during the covid-19 pandemic have returned to regular repayment discipline. Attendance in group meetings has increased to 70-80%, and that has helped us increase our collection efficiency. People are now growing their businesses, and that is one of the reasons why they are able to pay on time. For credit disbursed in the last two years—FY22 and FY23—our collection efficiency is over 97%. However, if you see only FY23, our collection efficiency is at 99%, showing an improvement in repayment behaviour.

Where do you see credit growth in FY24?

There are two parts to our loan growth. One is from loans to new customers, and another is through existing customers who are enhancing their loans. We will see 17-18% growth in microcredit and 20% growth for the whole bank in the current fiscal year.

Is the bank looking at new product categories?

We will soon launch credit cards. The bank had inked a partnership with Standard Chartered Bank for a co-branded credit card in 2019, which is no longer active. At Bandhan, we want to capture the opportunity primarily in the rural and semi-urban areas where our customers are based. That is not to say we will not go to the urban areas with this product.

How difficult and competitive is the Indian home loan market, and what is in for Bandhan in this pursuit?

The home loan market is big and there are not that many affordable housing players. Our housing loan book is now in good shape and stood at ₹26,580 crore as on 31 March. This includes home loans, loans against property, inter-bank participation certificates, and construction finance. This year, we are looking to achieve 25% growth in that portfolio. From the merger with Gruh Finance Ltd—completed in 2019—we got 195 branches, but now, we have over 400 branches for home loans. We will add more such home loan branches. The bank has strategically decided to push home loans in the affordable housing space across the country. We need to diversify our loan portfolio into more secured products. As of now, 42% of the book is secured, up from 36% in FY22. We expect that by FY26, half of our portfolio will become secured. By FY25, housing loans will account for 30% of our loan book, as against 25%. The bank’s ticket size in housing credit is ₹17-18 lakh.

How do you plan to match the credit uptick with growth in deposits?

Bandhan Bank would like to continue its growth in deposits and has a target of opening 550 branches over FY23 and FY24. About 60% of these have already been opened. The new branches will also help us get more deposits where we are focusing on current and savings accounts (CASA), especially the retail segment. There is some change in strategy too. About 72% of my branches are in rural and semi-urban areas, but the focus by cluster heads on these areas was not as much as on the urban areas. Bandhan had about 78 clusters earlier, and we are adding another 79 clusters. Each of these would comprise 8-10 branches and would renew our focus on rural and semi-urban areas. This process is also helping us get more deposits. The bank has been developing a separate vertical for current accounts to build this business. We are also developing a government business portfolio.

Updated: 20 Jun 2023, 11:59 PM IST