ESAF Small Finance Bank, which recently received banking licence, will focus on “agent based business model” to expand its market instead of brick-and-mortar branches.

“The agent network is a successive business model in the banking sector of many African countries and we want to replicate it here,” K Paul Thomas, Chairman and Managing Director, said.

The idea is to appoint at least 10,000 agents on a commission basis in the next five years to provide doorstep banking to customers, with services such as account opening, extending small-value loans and collection of dues, he told BusinessLine on the sidelines of an event in Thrissur.

ESAF Small Finance Bank is all set to start operations on March 17. It hopes to kick-off with a network of 85 retail branches and over 300 customer touch points, which would be opened through the year.

To attract business, the bank’s interest rate on retail deposits will be slightly on the higher side, the CMD said.

However, he declined to divulge the rates, saying it will be announced on the inaugural day. Moreover, there will be no restrictions on minimum balance in the first year, he said, adding that the bank has partnered with 30 large commercial banks to facilitate high-value loans. Aimed at HNIs and NRIs, a new deposit called ‘Hridaya’ will be introduced. The minimum amount to be deposited in this account will be ₹15 lakh, and this will be disbursed as housing, micro, education, and agri loans.

Digital banking will also be given prominence through Skype call facilities in branches, and tab-based banking, he added.

Based on the RBI guidelines that 25 per cent of the branches should be in un-banked areas, Thomas said ESAF has identified 39 branches in Kerala in the first phase and another 17 are awaiting approval. The plan is to cover the un-banked areas in the State first.

Besides metro cities, the operations will be extended to the North-East by opening the first branch in Assam in May.

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