It also plans to — after five years — apply to the Reserve Bank of India (RBI) to become a full-fledged universal commercial bank, Ghosh said here on April 24. The RBI allows a universal commercial bank to have lower capital adequacy ratio than a small finance bank (SFB), Ghosh said.
He was in the Capital to announce the commencement of USFB’s operations in New Delhi with the launch of five branches.
USFB, a wholly-owned subsidiary of Ujjivan Financial Services, had commenced operations as an SFB with effect from February 1 this year. Over the past decade, Ujjivan had built a strong presence in the National Capital Region (NCR) with nine micro-finance branches catering to over 71,000 customers.
Of these nine branches, as many as five have been converted into SFB branches. Two more in the NCR are likely to get converted into SFB branches this year, he added.
In all, Ujjivan Financial Services had 457 micro-finance branches operating in 24 States. After the launch of USFB, the plan is to convert all the 457 into regular SFB branches over a period of three financial years. By March 2018, USFB hopes to have 171 bank branches against 20 currently.
“Our transformation to a small finance bank will empower the un-served and under-served customer segment with a full range of banking services. Our immediate objective is to reach out to the large un-banked populace in New Delhi and get them into the formal banking system,” he said.
In the North, Ujjivan Financial Services had 118 micro-finance outlets, and this year 47 micro-finance branches would be converted into small finance bank branches.
Ghosh also made it clear that UFSB had no plan to raise tier-I capital for the next three years.
“We are very well-capitalised… at about Rs 1,600 crore,” he said.
Ghosh, however, said the bank was open to raising tier-II capital and may do so this fiscal.
Ittira Davis, Chief Operating Officer, said USFB was offering savings bank accounts with interest rate of 4 per cent.
Source: The Hindu Business Line