City-based Equitas Holdings, which recently received in-principle licensing approval from RBI, has begun preparatory work to enter the small finance banking sector, a top official said.
"We have just started the preparatory work. We will be merging three subsidiaries -- micro-finance, housing finance and non-banking finance company -- into one entity," Equitas Holdings Managing Director P N Vasudevan told reporters.
Equitas Holdings recently received approval from Reserve Bank of India to provide basic banking services to small farmers and micro-industries. The approval is valid for 18 months to enable the company comply with guidelines on small finance banks.
After beginning its journey in 2007 with an initial capital of Rs 13 crore, the company's net worth as of March 2015 stood at Rs 1,170 crore. Total loan book size was Rs 4,000 crore.
Stating that micro-finance business constitutes nearly 50 per cent of the portfolio, he said the average ticket size of a loan was about Rs 16,000.
On the steps to be taken by the company to comply with the RBI norms, he said, they would require to set up a "technology platform" for transition into banking services, merging the subsidiaries and setting up infrastructure.
Equitas Holdings has 350 branches and operates in 11 States, he said.
