CSB Bank plans to expand gold and retail portfolios, open branches in Tier 1 cities: MD & CEO

For fiscal year 2022-23, the lender recorded a profit of Rs 547 crore. Pralay Mondol says the bank is looking at partnering with fintech companies in the long run, but there are no plans for now.

Kerala-based CSB Bank is looking at a bigger share of the gold and retail loan market and plans to expand lending in these segments, said Pralay Mondal, managing director and chief executive officer (MD & CEO).

“We are seeing a rising demand in the gold and retail sectors and look forward to lending more,” said Mondal.

In an exclusive interaction with Moneycontrol (when?), Mondal said that the bank has more than half of its branches in semi-rural and urban areas, and is now planning to open new branches in Tier 1 cities.

“Scaling our operations in existing Tier 1 branches and opening new branches will be our target for this year,” Mondal said.

Edited excerpts:

What is your assessment on overall business growth last year?

We witnessed a growth and demand jump in FY2023. Our credit cost grew at a good pace, and we saw demand across segments and services. Our gross non-performing asset (GNPA) improved significantly.

We’ve been also improving our net income margin (NIM) but see a little compression this year. Overall, we should be able to manage our NIM and other numbers.

How was growth in the gold loan sector?

Gold loans witnessed a good 48 percent growth last year and we see the same continuing this year. We have also witnessed that the demand for gold loans is rising, and, hence, we are going to lend aggressively in the segment.

Our aim will be to target customers from our existing branches in metropolitan cities and through our digital channels.

Which other sectors are you looking to lend more to?

We are looking into lending to retail customers. We witnessed a 30 percent growth in the sector and are planning to lend through our mobile application and other digital channels.

Are you planning to become a pan-India bank?

Currently, we are present mostly in semi-urban and rural areas.

Going ahead, we are looking at expanding our services in our existing branches in urban areas and Tier 1 cities and open new branches as well.

Banks are aggressively working on fintech partnerships. What are your plans?

We are looking at partnering with fintech companies in the long run. There are no plans in place for now.

We think that after the first loss default guarantee (FLDG) guidelines by the Reserve Bank of India (RBI), there is a relief for fintechs as well as other partners, like banks, as now there is a structure in place.

Alongside this, we are making significant investments in our technology and digital banking services. We are not looking at making special customisations but we have made significant changes in our core banking systems and introduced a new application programming interface (API).

How is your deposit accretion after the Rs 2,000 note withdrawal?

Our bank did not see much accretion and impact as we are small. We still see some deposits as it is an exercise in process.

We’ve seen rising demand in the microfinance sector for your bank. Any plan of acquisition on that front?

We see good demand in the sector. For now, we are not looking at any acquisition of a microfinance unit.

What would be your growth outlook, going ahead?

There is a hawkish view from the regulator on inflation as well as repo rate. Monsoon will be a key factor.

We do not see our deposit rates rising as the repo rate is expected to stay at the current levels till the end of 2023. We also expect reasonable credit growth.