Fincare Small Finance Bank, earlier known as Disha Microfin, on Friday kickstarted its banking operations with about 25 branches across Gujarat, Tamil Nadu, Karnataka and Andhra Pradesh.

The bank was given small finance bank (SFB) licence by the RBI in May this year. On the day of its launch, the bank raised over ₹225 crore of deposits from about 1,000-odd depositors. This forms about 15 per cent of the bank’s existing balance sheet of ₹2,000 crore, which includes ₹1,350 crore as loans and advances and ₹450 crore as investments.

Fincare CEO Rajeev Yadav said the bank started its operations with 25 branches, of which nearly half are located in Gujarat.

“We also have over 250 offices of Disha MFI, which will be converted into banking outlets to facilitate our customers in remote locations. By the end of this fiscal, we plan to have 500 branches, including over 300 banking outlets, 60 full-service branches and about 130 partner branches,” said Yadav here.

The bank has about nine lakh borrowers with an average ticket size of ₹15,000. “Still the repayments have been slow for the past three months due to cash-flow impact after the demonetisation. But as the cash-flow situation starts improving we will see repayments returning to normal,” Yadav said.

Currently, Fincare has gross non-performing assets (GNPAs) of 7-8 per cent, while the net NPAs are 5-6 per cent.

In a bid to become a small finance bank, Disha Microfin had acquired the business of Future Financial Services in October 2016. Currently, the promoters and the management hold 20 per cent in Fincare, while the remaining 80 per cent is with PE funds.

The bank aims to be a digitally-driven, rural and semi-urban bank, focussing on priority sectors and retail segments of micro and small enterprises.

Fincare has set an ambitious target of 10 million customers with a deposit base of ₹14,000 crore and assets of ₹20,000 crore by 2022.

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