The Kerala based new Private Sector Bank, ESAF – Small Finance Bank, is set to open 145 new branches by March 2018. The bank has plans to take a shift from its micro finance tag to servicing industry, SMEs, Housing Finance and also Gold Loans.
ESAF which was previously a micro finance company, in similar lines to that of other 10 bodies who were granted license for opening small banks, in 2015 has at present 59 branches, out of which 56 operate in Kerala. The bank will inaugurate its branch in Mumbai on 22nd November 2017. ESAF was started in 1995 with $40,000 loan from Bangladesh based Grameen Bank Trust. Further other salient features of the proposed bank are:
- 50% of the branches would be situated outside Kerala.
- Some of the current license held by the company which is around 310 for opening micro finance branches, would be transferred to the bank in the next three years.
- As of now, 99% of the bank’s loans portfolio relate to micro finance loans linked to groups of borrowers and the average ticket size if around Rs. 60,000. The bank holds a total book value of Rs. 3320 crores and a major portion of the same are transferred from micro finance company.
- The retail deposits held amount to Rs. 600 crores out of total deposit figure of Rs. 1,114 crore.
- 11% of the Deposits are low cost current and savings deposits.
- The bank made a net profit of Rs. 5.25 crore in the quarter ended Sept 2017.
- The bank had a non performing assets of around 4.98% which is lower than the 7% reported in December last year.
RBI NORMS STATE THAT SMALL FINANCE BANKS ARE REQUIRED TO BE LISTED IN THE STOCK MARKET WHEN THE BANK REACHES A NET WORTH OF Rs. 500 CRORE, AND THE BANK EXPECTS TO REACH THIS BY 2020. THE COMPANY’S CURRENT NET WORTH IS Rs. 301 CRORE AND THEY HAVE TO PLANS TO LIST IN THE STOCK MARKET BY 2020.