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Ujjivan Small Finance Bank (Ujjivan SFB) rolled out full-fledged banking operations with five pilot branches in Bengaluru on Monday. The bank plans to be tech-driven for its pan-India roll-out and also to boost its day-to-day business.
Samit Ghosh, MD and CEO of Ujjivan Small Finance Bank, said, “We will be spending heavily on technology; ₹400 crore spending is planned for five years and will be mainly towards developing new technologies that may ease operations both at the front-end and the back-end. We will have to see how it works.”
The bank began its operations on pilot basis offering services to unserved and underserved customers.
“The bank has developed technologies that will provide a host of services such as door-step and paperless banking, mobile, Internet and phone banking, access to biometric ATMs and Aadhaar-enabled debit cards. These benefits are normally available only to premier customers of commercial banks,” said Ghosh.
He further added: “With technology and digitisation, our drive is Aadhaar-enabled KYC and our simplified process will enable account opening in five to seven minutes using biometric authentication on a hand-held device.”
On the effect of demonetisation on the bank, Ghosh said: “Before demonetisation, we had good repayment and almost nil NPAs. Even now there are nil NPAs. But due to demonetisation and lack of currency notes in circulation, many of our customers could not repay and have asked us for additional time to repay.”
“Repayment prior to demonetisation was 99 per cent month-on-month. During the demonetisation period, i.e. November – December 2016, repayment fell to 90 per cent. Now with fresh currency coming into circulation, we are inching closer to normalcy at around 97 per cent repayment,” he explained.
“It may take another six months for total normalcy to set in,” Ghosh said.
On challenges faced by micro-finance institutions (MFIs) transforming into full-fledged banks, Ghosh and Ittira Davis, COO of Ujjivan Small Finance Bank, said technology is a challenge. Retaining staff and training them is another challenge.
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