Capital Small Finance Bank rolled out its operations as the maiden small finance bank of the country from Jalandhar in Punjab. The new journey for Capital Local Area Bank which became Capital Small Finance Bank on Sunday could bring more business to its fold under the new guidelines of the Reserve Bank of India. In an interview with Komal Amit Gera, the managing director of the bank, Sarvjit Singh Samra, explains the road map. Edited excerpts:
Tell us about your expansion plans.
Read more from our special coverage on "SARVJIT SINGH SAMRA"
As a Capital Local Area Bank, we were operating in five districts of Punjab. Now, we have licence to open branch anywhere in the country. But, we would add new branches in Punjab in the first year so that the total number of branches would reach 76 by the end of FY17. Then, we will expand to the neighbouring states of Haryana, Himachal Pradesh, Rajasthan, Uttarakhand and Union territory Delhi. We plan to have 216 branches in five years.
A senior banker had indicated earlier that the model of these new age banks is not viable. What is your take on this opinion?
We have already proved the viability of this model in the past 16 years by working as Capital Local Area Bank. So, we are undeterred by such opinions. The scale of operation would help to cut cost and better business would enhance viability.
When do you plan to get listed?
We have a healthy financial performance and might not get listed very soon. We plan to get listed after four-five years.
Do you plan to give a special focus on non-resident Indian (NRI) Punjabi diaspora to mobilise business?
The NRI accounts contribute about 8 per cent-10 per cent of the bank's deposits. We plan to maintain it in our new avatar. No special focus for this segment has been proposed at present due to volatility in exchange rates and uncertainity in global economies. As a small finance bank, we would be able to get government and public sector undertaking accounts that would help us tap large volume of business.
Which verticals will you focus on?
Our focus will remain on micro, small and medium enterprises, retail lending and agriculture. With the help of financial literacy, growth in this segment can be manifold. As we hire staff from local areas, there is no language barrier and we project lucrative business from our existing segment in the new territories.