Public sector major Bank of Baroda (BoB) is targeting disbursal of Rs 90,000 crore in digital advances in FY24, chief digital officer Akhil Handa told Piyush Shukla. Excerpts:
How many customers have linked RuPay credit cards with UPI?
The UPI is becoming the sub-structure on which many features are being added. Having dealt with account-based payments, we have moved to credit line-based payments. Credit card activity on UPI is also picking up quite well. We have just rolled it out and already nearly 8% of our active RuPay credit card users have started transacting on this. While here is the novelty factor, I think over a period of time, we should have upwards of 30% traction on this product.
What about the usage of UPI Lite?
It is very important that we have a UPI Lite kind of a wallet structure given the volume of transactions that take place through UPI. Wallet transactions were dominant before UPI came in and I think now UPI having a wallet will restore the status quo ante. We process nearly close to around 1.5 crore-2 crore UPI transactions every day. We are the third largest UPI remitter bank in India and 60% of our transactions are smaller than Rs 200, which fits in with the mandate of UPI Lite.
What are you views on monetisation of UPI?
I feel that for continued investments in the infrastructure, we need to be able to rationalise the cost of processing the transactions. The government has, of course, been very mindful of this and discussions are on I believe. They are obviously exploring all avenues, including providing incentives, which they have done. So, I think they are doing it. However, the government also looks at multiple other aspects rather than just commercial aspect, so I think this is something that is best left to the government.
What is the digital lending target for FY24?
Last year, we did nearly Rs 70,000 crore of digital loans. This year, we are targeting Rs 90,000 crore of digital loans, of which we are targeting about 30% as end-to-end digital. That to my mind is very substantial number and very soon we will target Rs 1 trillion of digital loans. They are pretty evenly spread across segments.
Can you share volumes of CBDC transactions done by the bank?
This is a completely new ground for the payments system so I think it is still premature to talk about the volumes. Currently you need to test the infrastructure, the efficiency of payments and also ascertain if security aspects are well contained.
What are your plans for digital co-lending platform this fiscal?
I have to be humble and acknowledge that we did not achieve our Rs 10,000 crore target for FY23. To my mind, we underestimated the complexity of bringing in the alignment with NBFCs. Having said that, now we have a very well-oiled pipeline and we are doing partnerships after partnerships and are scaling up. Today this is being run as a strategy business unit as well in the bank.
So, I am confident we will see very good numbers but I will refrain from giving you a number on it. We are looking at a range of products, including MSME, both secured and unsecured and housing. We are also looking at products where we typically have not been a big player and that is where the complementary natures of the bank and the partners play out well. For example, unsecured MSME loans is an area where partnering with an NBFC or even a Fintech makes a lot of sense.