Banking on experience

Jaipur may seem to be an odd place for a small finance bank to be headquartered, but that should not be a cause of worry, especially when institutions like the Asian Development Bank, International Finance Corporation, Dutch Development Bank, Franklin Templeton and ICICI Pru AMC have invested in excess of Rs 3,000 crore and marquee investor Warburg Pincus owns 22 percent in AU Small Finance Bank. The recently listed small bank has been a very strong player in the NBFC space and is well entrenched in the geography of the ten states it is operating from. “The transformation from Au Financiers to Au Small Finance Bank was in the coming after we got the banking license in December. We will stick to our core expertise in risk management and operate in segments that we best understand,” says Sanjay Agarwal, MD, AU Small Finance Bank. The fact that the bank is making entry so late in the day does not worry Agarwal, who is confident that the use of technology will work in his favour. “We are not asking people to come to our bank. Today, with Aadhar facilitating identity, we have the capability to go meet a client and get him on board from his house,” he argues.

Fully geared

Agarwal and his team are all set for the transformation and believe the timing could not have been better, given the digital push by the government in the financial services sector. “We were adequately funded and could have continued as an NBFC. But, the investors felt it will help us grow,” he confesses. However, the big boon that the bank will have from the public listing is to fall under the mandated regulations that small financial banks have to meet. This, he feels will showcase their abilities for both investors and those looking to bank with them.

The new bank is prepared with footprints across ten states to start with, which it will expand over the next two years. Agarwal is also banking heavily on technology and digitisation, which he feels is already changing the way we bank. “Demonetisation has helped players like us who do not have any legacy issues and are agile to move faster into the banking systems expected from a new bank,” he stresses.

Be it recruitment, risk analysis, transactions or reaching out to new customers -- the digital focus will change the very manner in which banking is experienced. His enthusiasm is infectious and in the coming months the bank’s operations will not only increase awareness about it, but also get in more people to bank with it. Watch out for what the bank offers in the coming times, as the innovation could be beyond just higher depsoit rate.

Sanjay Agarwal
MD, AU Small Finance Bank

olmdesk@outlookindia.com