India's largest private lender, HDFC Bank on September 26 said it will expand its reach to two lakh villages in the next 18-24 months.
The bank plans this expansion through a combination of branch network, business correspondents, business facilitators, CSC partners, virtual relationship management and digital outreach platforms, the lender said.
This will increase the bank’s rural outreach to about a third of the country’s villages, it said.
HDFC Bank currently offers its products and services to MSMEs in over 550 districts. The bank aims to double its reach to 2,00,000 villages. As a part of this plan it plans to hire 2,500 people more in the next 6 months, it said.
"India's rural and semi-urban markets are under-served in credit extension. They present sustainable long-term growth opportunities for the Indian banking system," said Rahul Shukla, Group Head – Commercial and Rural Banking, HDFC Bank.
"HDFC Bank remains committed to extend credit, responsibly, in service of the nation. Going forward we dream of making ourselves accessible in every pin code,” Shukla said.
On September 7, HDFC Bank inked a memorandum of understanding (MoU) with National Small Industries Corporation (NSIC) to offer credit support to MSMEs across the country.
HDFC Bank will provide MSMEs tailored schemes and extend support to MSME projects, the bank said.
Under the arrangement, the bank will accept loan applications forwarded by NSIC and sanction it on merit and as per lending norms of the bank, it said. HDFC Bank will finance projects related to the MSME sector at different places where its branches are located or at important industrial centres.
In an interview to Moneycontrol in February this year, Shukla had said that HDFC Bank did not expect the NPAs (non-performing assets) in its wholesale division to worsen.Banks have been reasonably prudent in their approach towards lending. There is an enormous focus on governance. Tight regulatory framework, increased supervision as well as board oversight have had a very positive impact, Shukla said.