Federal Bank on Wednesday opened 26 branches across Tamil Nadu and Puducherry, placing it on track to reach a pan-India network of 1,500 branches as it ends fiscal year 2023-24. With this, the private sector bank has crossed 250 branches in TN and Puducherry and added 50 branches this fiscal including today’s launch.

“As the fiscal year ends, we have opened around 140 branches, which is almost 10 per cent addition. Last year, we opened around 75 branches. Going forward, we expect to maintain the 5-7 per cent additions,” Federal Bank MD Shyam Srinivasan told businessline. “As much as the banking world goes digital, there is a need for physical presence for customer connect and visibility,” he added.

Gold loan

With an eye on gold loan, agri loans, and small business lending products, the new branches are concentrated in the tier-2 and tier- 3 and unbanked rural centres, where level of digital penetration is modest. These include branches in districts like Chengalpattu, Thiruvallur, Pudukottai, Dharmapuri and Salem. They are typically smaller in size with 2-3 member teams manning them, Srinivasan said. “Earlier, it took three years to break even on a new branch. But with branches now acting as service units dealing with safer and higher margin products, the break-even period is down to two years,” he added.

As use of tech in banking gathers pace, Srinivasan said digital push will continue, and their strategy involves creating products that customers can engage with intuitively. “We are working on a WhatsApp-based credit card application and processing system for existing customers. We did it for personal loans earlier, and saw almost ₹20-30-crore disbursal through the route per month,” he said. Federal Bank recently launched Flash Pay, a RuPay smart keychain for users to make contactless National Common Mobility Card payments.

As his 14-year tenure comes to an end in September, Srinivasana said the board is considering both internal and external candidates for succession and will likely put forward names to the regulator by August.