Ujjivan SFB aims to become mass market retail bank

Ujjivan Small Finance Bank (SFB), which commenced its operations with five pilot branches in Bengaluru on Monday, aims to become a mass market retail bank at the end of five years.

“Our vision is to become a mass market retail bank in five years. There is a big gap in the country in providing banking services to the mass market, which is supposed to be provided by public sector banks. At the end of five years, we can request for a universal bank licence from the RBI,” Ujjivan SFB MD and CEO Samit Ghosh told DH.

He added that as an SFB, it will be true to its mandate of providing services to the unserved and underserved people across the country.

According to RBI, SFBs should primarily undertake basic banking activities of acceptance of deposits, and lendings to unserved and underserved sections. “We are piloting with five branches, and in the next month 10, and in the next six months or so, we would have converted all our 457 older branches into bank branches,” said Ghosh, adding that 66 new branches will be opened in the unbanked and rural areas.

In September 2015, the RBI granted in-principle licence to 10 entities for SFBs, and in November last year, Ujjivan received the final licence from the apex bank.

Internet banking
Mobile and Internet banking will be provided to customers, and Ujjivan SFB looks at opening 232 ATMs by March 2018. The bank has a loan portfolio of Rs 6,525 crore.

Its 35 lakh customers across 24 states will be converted into bank customers over a period of time. “Apart from this, we will be acquiring new customers. We have a separate team, and they will go within 3 km of a branch to identify people who have bank accounts, but save money in the unorganised sector,” said Ghosh, adding, “While some banks hire new people when they commence operations, we have trained our existing staff and a lot of money has been invested in training.”

When asked about interest rate of FD and savings accounts, Ghosh said, “People are very sensitive about interest rate on fixed deposits, and so, we will offer 1% more than the prevailing market rates, and in case of savings account, it will be 4%.”

Of the current strength of 10,000 employees, close to 2,000 are new entrants. Also, the bank bets big on technology, as it will spend over Rs 400 crore over a five-year period on technology.

The bank will offer its customers unlimited access to ATM transactions on its ATM networks, and a total of six free transactions on other banks’ ATM networks.
DH News Service