The new SFB is expected to start operations by the first quarter of Jan 2017.
ESAF will be the first bank to be given a banking license in Kerala since independence.
K Paul Thomas, Chairman & Managing Director, ESAF Microfinance, said that the new bank will face increase in expenditure due to infrastructure development and HR requirements. In course of time, the cost of funds will come down and the benefits can be passed over to the end customers.
Currently, ESAF Microfinance has around 3,000 employees and by March 2017, it will be increased to 3500.
On the day one, the bank will be launched in Kerala and Tamil Nadu and gradually it will be expanded to other parts of India.
ESAF has plans to give special focus to the north eastern parts of India.
ESAF will offer multiple channels to the clients to access accounts including digital channels like mobile and internet banking, apart from services through branches.
The company has invested around Rs 20 crore so far in IT. FIS Global has been engaged as the system integrator for the project and E&Y as the principal consultant for the banking transformation.
At present, the organization has presence in 11 states in India. The company has 1.2 million clients at present and has plans to reach three million households by 2020.