Jana Small Finance Bank is looking at listing its shares by March 2021

Jana Small Finance Bank, formerly Janalakshmi Financial Services, is looking at listing its shares by March 2021. It started operations on March 28.

As a micro finance institution, Bengaluru-based Janalakshmi raised Rs 16 billion as capital in 2017-18. It hopes to raise about Rs 3 billion soon.

The bank’s Managing Director and Chief Executive Officer Ajay Kanwal said according to the rules for small finance banks (SFBs), these have to list on exchanges within three years of starting operations.  

Merchant banking sources said the listing of shares of SFB on exchanges will give an opportunity to some institutional investors, who have infused capital in these entities, to exit.

Jana Small Finance Bank has started with a comfortable capital adequacy ratio (CAR) of about 35 per cent and loan book of Rs 80 billion, Kanwal said.

To cover its extensive customer base, the bank will initially open 19 branches across 18 states and expand to 200 banking outlets including rural branches by June 2018.  Many branches will be opened in affluent and semi-affluent areas.

Jana Small Finance Bank will also convert majority of its micro finance branches into full-fledged one and will have about 600 banking outlets by end of 2019.  

As Jana Bank which is digitally enabled across majority of its offerings with expanded customer base, will continue to focus on financial inclusion as its core strategy. Ramesh Ramanathan, Chairman, Jana Group, said, “Financial inclusion has been the primary vision of Jana Group. We see the commencement of banking operations duly supported by the digital capabilities to scale quickly and presents powerful opportunities to bridge the overall financial inclusion gap”.

Elaborating on business strategy for growing loan book, Kanwal said it would extend cash loans, loans against gold. It will also hawk affordable housing credit and later start disbursing loans for consumer durable and two wheelers.  

Janalakshmi Financial Services bore the brunt of demonitisation in 2016 and saw sharp rise in delinquencies in last financial year.

According to rating agency ICRA company took steps to improve its collections by augmenting the field strength, ramping up tele-calling capacity and initiating legal actions via Lok Adalats against delinquent borrowers.

The company has taken steps to control its operating costs and has drawn a medium term plan to reduce annual operating costs by about Rs four billion by FY2019-FY2020. This includes closure/consolidation of about 25 per cent of the current branch network and rationalization of the manpower, which are at various levels of implementation.