Capital Small Finance Bank is in no hurry to apply for a universal banking licence, managing director and CEO Sarvjit Samra said.
“We aspire to be a universal bank one day. But at this moment, we think that we first want to grow in this avatar…” Samra said.
The small finance bank is left with a box to check – the net NPA ratio – to become eligible to apply for a universal banking licence. As on June 30, the net NPA ratio stood at 1.4%.
The SFB aims to grow its loan book at 20% for the current financial year. On the deposits front, it will continue to focus on current account, savings account deposits and retail deposits.
AD-1 licence on hold amid forex ramp-up
Despite a rise in provisions, the bank reported a net profit of Rs 32 crore for the June quarter, compared with Rs 30.02 crore in the year-ago period.
The management said it will not apply for an authorised dealer-1 licence until its scales up the forex business, “We still have not applied for AD-1 licence. We are evaluating it, there is no timeline as of now,” Samra said.
In 2023, the bank had said it would “shortly” apply for the said licence. Regarding the delay, executive director Munish Jain said, “We are able to deliver a profit of Rs 1 crore from the forex business. At this stage, we are strengthening our capabilities and increasing the customer outreach with AD-2 facilities.”
Retail focus remains core to Capital SFB’s strategy
The AD-1 licence is a must for a bank if it is focused on trade finance or corporate lending. Since Capital SFB is retail focused and serves middle-income customers, it is not very keen on it as of now. “Obviously, once we have that kind of business segment, we will require to go that direction…” Samra said.