The private lender plans to double its corporate client base on its API banking platform this financial year.
At a time when corporate lending has taken a hit, Yes Bank is looking to strengthen its transaction banking business to boost fee income.
The private lender plans to double its corporate client base on API banking platform this financial year, said Asit Oberoi, Senior Group President and Global Head Transaction Banking Group and Chief Experience Officer, Yes Bank.
Currently, Yes Bank's transaction banking business, which has 1,000 corporate clients on the API platform, contributes 15-20 percent to its revenue. The business witnessed a compound annual growth rate of 40-45 percent in the last three years, Oberoi said.
In banking, application programming interface (API) enables third party entities to access a bank's online system. For instance, a company that wants to settle transactions with its supply-chain dealers on a real time basis, can do so from its own processing system. It need not log in to a corporate net banking portal to transfer funds.
Some of the bank's clients include Snapdeal, Ola, Tata Motors and DTDC India. Yes Bank also recently won a mandate for API banking from a large telecom player, the bank's Chief Executive Officer Ravneet Gill said, without naming the company in an earnings call on July 17.
In April-June quarter, Yes Bank's other income that includes fees and commission fell by 24.9 percent, as compared to the same period last financial year. Gill said that the bank hit a pause on corporate finance underwritings in the first quarter, leading to the decline.
The bank had to write-back Rs 300 crore of corporate fees, as it cut exposures in the first quarter. Moreover, the bank has decided to make accounting changes to its corporate fees. Instead of an upfront charge, the bank will amortise fees over a period, a move expected to further impact its fee income.
In such a scenario, the bank hopes to lure corporate clients to boost its liability business by providing seamless transacting experience with the help of technology.
The competition is getting tougher as more and more banks in the country are building their API platforms. But, scalability of the applications and extent of their customisation will be key to capturing the market.
The bank would induct 40-45 more employees to its transaction banking department this fiscal, Oberoi said.The Great Diwali Discount!
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