In an interactive session with the MD & CEO, Ujjivan Small Finance Bank, Ittira Davis, MD & CEO of the bank has expressed his views on the future of the bank and its presence in East and North East. Excerpts:

Ujjivan Small finance Bank, a mass market focused bank in India started its journey by the promoter of the bank Ujjivan Financial Services Limited, which started as a micro finance company in 2005 with a mission to provide unserved and underserved segment of customers who were not getting adequate banking services and importance by financial institutions. In 2015, Ujjivan Financial Services got RBI clearance to start a bank under the RBI regulation and the bank started operation in February 2017. The bank is operating with a customer base of over 75 lakhs across the country, out of which 6 lakh customers are from West Bengal. Being a pan-India bank with head office in Bangalore, in last few years the bank has remarkably increased its operation in North and East with three north eastern states – Assam, Meghalaya and Tripura. The bank has a strong network of 671 branches in 25 states and UTs of the country and plans to enter Andhra Pradesh. As an expansion plan, the bank will add 104 more branches in the current financial year, where more than 20 percent will add in east, primarily in West Bengal and Bihar. The bank has also adopted a 100 days plan for Assam, where the bank is primarily investing into affordable housing and 2-wheelers loans apart from group and individual loans. As a part of 100 days plan, assam is a priority state for the bank and will soon introduce gold loan. In Tripura, the bank will focus on MSME segment and growing exponentially as a major bank. The bank has 90 branches in West Bengal spread over 22 districts and set to increase by another 10-12 branches this fiscal. The bank is set to increase its workforce by more than 1000 employees in eastern region only by this fiscal to handle the increased business volume.

The bank is focussing to increase its digital port portfolio by October 2023 to attract the young generation customers, where they can start their fixed deposit or operate their account digitally. Apart from “Hello Ujjivan” – the first voice, visual, vernacular banking app in the country in eight different languages including Bengali, the bank has recently started “Digi Mitra” as an extended service of their digital banking, where the customers’ query will be addressed by the designated bank employees not by the call centre like others. Thus, bank is now set for all round development to provide modern day digital banking to its customers.

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As a priority sector banking, the bank has grown 264% in affordable housing portfolio in last four years as of March 2023. The growth is primarily into the home construction and home improvement segment in semi urban and rural areas, with a ticket size of 5 lakhs to 75 lakhs.

AS a part of financial highlight, the bank has given a loan of Rs, 25326 Cr as against the deposit mobilisation of Rs. 26660 Cr in first quarter of this fiscal. Loan growth is 30 percent year on year as against the deposit growth is 45 percent year on year as of first quarter FY 2023-24. Due to covid, the balance sheet of the bank has gone to red but by keeping provision in a right manner, the bank has made profit subsequently and finally has posted a highest ever PAT of Rs. 324 Cr in Q1 2023-24. The gross NPA has been declined to 2.4 percent as of June 2023 as against 2.6 percent of last financial year. Whereas the net NPA is as negligible as 0.06 percent as of June 2023. The bank is expecting a growth in deposit by 25 to 30 percent by the end of March 2024. The bank aims to grow its asset business with a balance mix of secured and unsecured portfolio in next 3 years. The bank is exploring to offer mutual fund products through the third-party partners by the end of this fiscal. Presently the bank is very focused in lending in MSME sector, where 9-10 percent of the total lending of the bank is into this sector. In affordable housing loan sector, the bank is set into almost 15 percent of their total lending corpus and planning to inroad more into this segment as their priority area.

Finally, the group is eyeing the reverse merger process by end of this fiscal, where the promoting company will merge into the bank with a swap of 11.6 per share between the Ujjivan Financial Services and Ujjivan Small Finance bank.