IGI Logo

Background & Operations:

Suryoday Small Finance Bank Ltd (SSFBL) was among the leading SFBs in India in terms of net interest margins, return on assets, yields and deposit growth and had the lowest costto-income ratio among SFBs in India in Fiscal 2020. It has for over a decade been serving customers in the unbanked and underbanked segments in India and promoting financial inclusion.

Prior to commencement of operations as an SFB, it operated as an NBFC – MFI carrying out microfinance operations and operated the joint liability group-lending model for providing collateral-free, small ticket-size loans to economically active women belonging to weaker sections. Its average “priority sector” loans, as a percentage of average ANBC for Fiscal 2018, 2019 and 2020 and nine months ended December 31, 2020 was 99.08%, 112.10%, 103.67% and 114.09%, respectively.

Over the years, it has diversified its loan portfolio to include non-micro banking loans thereby reducing its dependence on micro banking business.

As of December 31, 2020, SSFBL’s customer base was 1.44 million and its employee base comprised 4,770 employees and it operated 554 Banking Outlets including 153 Unbanked Rural Centres (“URCs”). It has set up 661 customer service points (“CSPs”) as additional service or touch points during April 1, 2020 and January 31, 2021 and intends to continue to expand its reach through the CSP model. Its delivery platform also includes partnering with business correspondents (“BCs”) for sourcing both asset and liability business and has expanded its network and presence through its reach to promote financial inclusion.

It has arrangements with various payment banks in India and has been able to leverage its relationship with such payment banks to grow its deposit base. The Company’s distribution network also comprises its ATMs, phone banking, mobile banking, tablet banking, unified payment interface, CSPs, and internet banking services. Its operations are predominantly in urban and semi-urban locations due to greater income earning capabilities and employment opportunities in such areas compared with rural regions

SSFBL currently offers a variety of asset and liability products and services designed for inclusive finance and general banking customers. Its asset products consist of its inclusive finance portfolio (comprising loans to JLG customers), commercial vehicle loans, affordable housing loans, micro business loans, unsecured micro and small enterprise and small and medium enterprise loans, secured business loans, financial intermediary group loans and other loans. In addition to its loan and deposit products, it also offers other banking facilities, products and services to generate non-interest income and cater towards the additional needs of its customers.

These facilities, products and services include debit cards, internet banking, mobile banking, online bill payment services and the distribution of third-party life and general insurance products and mutual fund products. It has leveraged the use of technology across all aspects of its operations. In particular, it uses digital technology for customer acquisition and also customer lifecycle management. Its employees use tablets to service customers in the unbanked and underbanked segments which has led to greater customer convenience and improved operational efficiency. It also has a robust back-end operating system supported by its core banking system and document management system

Going forward, SSFBL intends to strengthen its relationship with its existing customers by leveraging its inclusive finance customer base and by offering other asset and liability products based on the requirements. Its focus will be to grow its customer base by providing quality customer service. It will continue to focus on the use of technology, explore partnerships with fintech companies, undertake data analytics to better understand the requirements of its customers, improve operational efficiency and further reduce costs.

As it grows its operations, it will look to selectively expand its network of Banking Outlets across newer geographies and also penetrate further into its existing markets. SSFBL also intends to engage with BC partners and payment banks to leverage its network to help expand and increase its market share.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://www.hdfcsec.com/article/disclaimer-1795

SEBI Registration number is INZ000171337

Above views are of the author and not of the website kindly read disclaimer