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RBL Bank’s retail book has been growing at an impressive pace. Credit card issuances have more than doubled to nearly 2.43 lakh customers as have spends over the past year.
Lending to micro and small enterprises has also more than doubled to ₹333 crore from about ₹143 crore in the previous year with the number of clients quadrupling.
Harjeet Toor, Head of Cards, Retail & MSME lending and Financial Inclusion at RBL Bank, is satisfied with the robust growth numbers but is also conscious that these figures look good because the base is still small.
Asked about RBL’s strategy to acquire customers in the competitive retail lending market, Toor said the aim was to focus on under-served markets, especially salaried customers working in small private limited companies. The space that they would straddle is currently dominated by public sector banks and non-banking finance companies, he said.
Interestingly, 90 per cent of RBL’s card customers are those from other banks. Toor said that the existing customer base was still not big enough for cross-selling efforts to start yielding results.
On financial inclusion (micro-finance) initiatives, Toor said that the bank was now operating across 13 States through 10 banking correspondents. It was able to serve 13.7 lakh customers with a book size of ₹2,169 crore, he said.
Given that about 15 per cent of micro-finance loans at the industry level (nearly ₹15,000 crore) was under stress following demonetisation, Toor agreed that his bank customers were also affected a bit by rural sector distress. Some customers were also in default in anticipation of loan waiver by the government, although this was promised only for some crop loans.
Asked about the competition faced by RBL from payments and small finance banks, Toor said that he saw payments banks as enablers and it would be possible to work with them and build on their distribution strengths to improve penetration in rural hinterlands.
He anticipated greater competition to come from small finance banks, though he said this would be more visible two to three years from now. Currently, they (SFBs) are focussed on getting their act together and meeting the compliance challenges. This would provide a window of opportunity for RBL, Toor said.
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