IDFC Bank plans to double retail book

Claims to have mobilised Rs 400 crore through digital banking

IDFC Bank, which concluded its first full year of operations in FY17, said its vision was to become a mass retail bank in 5 years. 

To support this growth, the bank plans to accelerate retail lending and retail liability acquisition. The bank plans to double the share of its retail book, systematically bring down the proportion of the corporate-funded book, and further reduce exposure to infrastructure over 2-3 years.
 

IDFC Bank had started banking operations on October 1, 2015. An annual general meeting of bank shareholders will be held on July 28 in Chennai. 

In a letter to shareholders, Rajiv B Lall, founder, managing director & CEO, said the lender had made significant progress in its objective to transform into a mass retail bank in the past year. Partnerships and alliances would play a critical role in this journey. Delivering banking products and solutions across networks owned by business correspondents and partners to customers would play an important role in fulfilling this vision.

“We are confident of our ability to leverage our click-and-mortar retail franchise and our established corporate business to take advantage of the opportunities that may emerge as the economy gains momentum, while continuing to invest in technology and human capital to support our business growth,” Lall said.
 

The bank is planning to increase the retail share in advances across all customer segments, pursue cost-effective acquisition at scale, especially of mass affluent and mass retail customers, for deposit mobilisation.
 

As of March 31, 2017, over 25 per cent of the bank’s funded credit was “retailised” and infrastructure concentration was lower by 15 percentage points relative to last year. Client-based fees contributed 12 per cent to its operating income.
 

The bank’s deposits stood at Rs 40,208 crore at the end of March 2017. Low-cost current account savings account (CASA) deposits were at Rs 2,094 crore, which it claimed was significant for a new bank. “This reflects your bank’s strong distribution reach and ability to mobilise low-cost liabilities from depositors around the country,” it said. Retail businesses grew steadily and there was healthy growth in retail deposits and loans, supported by an expanding network.
 

More than 20,000 customers were acquired digitally, who opened more than 30,000 accounts, and balances in excess of Rs400 crore were mobilised through these digital accounts. The bank claimed it had a customer base of around 1.4 million. It has a network of 8,613 points-of-presence across 20 states, 19 major cities, 150 districts, serving 33,000 villages.

The bank also acquired Grama Vidiyal Micro Finance Limited, now renamed IDFC Bharat Limited.