Tamil Naidu-based City Union Bank gears up to launch a host of digital products over the next few weeks to help MSMEs, retail streams of housing, and car loans, Managing Director and Chief Executive Officer N Kamakodi said in an interview with Moneycontrol.
The products will be launched with the help of Boston Consulting Group (BCG). "We are looking forward for the role out of first product in the next few weeks. All products should be on track in the next 3 months. Once the product comes out live, minimum documents will be sufficient from applicants. Most of the required data will be accessed and processed from the sources directly and processed digitally," he said.
The City Union chief added that the introduction of UPI and QR code have reduced the use of plastic money, particularly PoS and other technologies. "We are bringing in the digital instruments to be in sync with the trend in the markets," he said. Excerpts from the interview:
City Union Bank (CUB) appointed Boston Consulting Group (BCG) for upgrading the digital-lending processes. How is it going?
The project is on track. Separate streams are being worked out for MSMEs, retail streams of housing and car loans. We are looking forward to the role out of first product in the next few weeks.
All products should be on track in the next 3 months. Once the product comes out live, minimum documents will be sufficient from applicants. Most of the required data will be accessed and processed from the sources directly and processed digitally. This will considerably reduce TAT (Turn Around Time) for our MSME-secured credit delivery.
Do you think the UPI ATM will impact the card business?
We were the first bank to start this project way back in 2019-20, the pre-Covid era. The rollout was in cold storage because of the pandemic. This will improve customer convenience multifold. You have seen how the introduction of UPI and QR codes has distrusted card usage, particularly the usage of PoS and other technologies. UPI ATMs will further reduce the usage of cards.
City Union Bank is among the early banks that went live with this feature in more than 800 ATMs so far.
What kind of partnerships are in the pipeline in the near future?
Digital lending with a lot of integration with fintechs using APIs is creating revolutionary changes in the way banking is progressing. When we complete the digital lending project, it will have multiple fintech/ digital partnerships. We have always been bankers for MSMEs, commercial trading, agriculture and gold loans.
How CUB is gearing up for the upcoming festive season?
We usually see higher demand for credit with the start of the festive season every year. We used to have higher share of growth in the second half starting with the festival season. We are fully geared up for that.
What are the major targets for CUB this financial year?
We are exploring new possibilities in co-lending space such as housing and vehicle loans not only to be competitive but also to achieve 12-14 percent growth during FY24. We have not gone into retail lending, services lending or NBFC lending in the past.
Now, I think we have to get into those segments and also take it to the double-digit growth rate for the current year, for which we have started making our initiatives.
What is your outlook on the Indian banking sector?
Our banking system is resilient and always fully prepared to face challenges. In the last two decades, we have seen how our banking sector has steadily cleared through multiple cycles like be it global financial crisis or the Covid pandemic or geopolitical crises. Our banking system is adequately capitalised and have robust risk management systems which are improving day by day.
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