Retail biz will account for 20% of advances: IDFC Bank chief

IDFC Bank expects retail sector to account for one-fifth of advances and 10-12 per cent of deposits by the end of current fiscal as the youngest private bank accelerates customer acquisitions and distribution ramp up to achieve its vision.

It has set out a vision to transform into a mass retail bank in the next five years, by targeting customers in four segments.

“Our goal is to systematically build mass retail bank. We expect that by March 31, 2017, about 20 per cent ( ₹18,000 crore) of our overall advances to be retail-focussed. About 10-12 per cent of deposits will be from retail,” Rajiv Lall, Founder Managing Director and CEO of IDFC Bank told BusinessLine after the company’s annual general meeting here.

To achieve its objectives, the bank plans to expedite the customer acquisition process both in organic and inorganic routes.

“We are already accumulating or acquiring organically about 15,000 customers a month. This pace will be accelerated significantly. The acquisition deal of Grama Vidiyal Microfinance will close in three-four weeks and it will become a 100 per cent subsidiary of IDFC Bank. With this deal, we will have 1.5 million customers within 15 months of launching the banking operations,” he added,

The bank will also boost its presence to 1,400 touch points across 20 cities in 10 States by end-March 2017. As of June quarter of this fiscal, it had about 380 touch points, which include 50 branches and 330 micro ATMs. “When I say point of presence, I don’t mean branches, because, our distribution architecture is much less-reliant on branches, but interspersed with extending our presence through partners, micro ATMs and other channels, including digital,” explained Lall.

So, in its 1,400 touch points, IDFC Bank will have only 75 branches. Its plan is to build a very wide customer reach, very quickly with fewer braches per customer and fewer bank employees per customer.

Lall highlighted that IDFC Bank would focus on four key segments to drive its growth. They include business banking segment (companies with turnover of less than ₹35 crore), salaried segment (corporate, young and old categories), micro enterprises and self-employed women.

In all the four segments, the company plans to attract customers by addressing product and service gaps and through price incentives. Its offerings include doorstep banking for bulk cash handling in the business banking segment, Aadhaar-based account opening in four minutes and differentiated booster home loans, among others.

The bank offers an attractive rate for fixed deposits and no charges for early withdrawal. “Up to ₹1 crore, the rate will be 8.25 per cent per year and for senior citizens, an additional 50 basis points will be given,” he said.

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