Axis Bank is looking to increase its unsecured businesses on the retail side even as it’s busy ramping up the digital platform. Jairam Sridharan, head of retail lending and payments, tells Bhavik Nair that the Indian consumer is becoming more aspirational in terms of his need for quality services and is unwilling to put up with quality issues for small fees. Excerpts:

What will be your growth strategy in the future?

On the lending side, retail has continued to be a source of strength in the industry even as corporate credit growth is sluggish. The India story depends on four pillars: Consumption demand, small businesses, payments and infrastructure. These are the themes that we have been pursuing and will continue to invest in all four.

We will also continue to push our flagship products, i.e., home loans. Over the last few years, we have said that we are interested in moving our mix away from fully secured products towards more unsecured businesses. We will continue to do that and move towards credit cards, personal loans and small business lending.

Wouldn’t that create more risk?

Of course, it would, but then that is what you get paid for. As a bank, we would like a good mix of very low risk, but relatively low yielding businesses and other businesses that have a little bit of higher risk, but also have commensurately higher returns. We are going to create an appropriate balance between them.

Tell us something about the new personal loan service on your mobile app.

We now have a functionality on our mobile app where a customer can apply for personal loan, and not only will he get the loan approval instantly, but the money will also get immediately credited to his account. This service, called ‘24X7 Instant Personal Loan’, is available for existing customers. Based on the latest information on customers, their track record and credit risk, we make offers to them. Once the customer chooses the amount he wants out of the total pre-approved amount, along with the tenure, and accepts the terms & conditions, the money gets instantly credited to his account. The screen shows the interest rate, processing fee and the EMI amount. For our top-end customers, we are offering all the way up to R5 lakh.

Even PSBs are rolling out apps and the minimum deposit amount required to open an account is way below there. Why should customers approach you?

Different people have different aspirations and self-assessment in terms of what level and quality of service they want and what they are willing to pay for it. There will always be a base of customers that is ready to put up with service quality issues for a lower price. We are targeting a slightly different base where the customer values the quality of service, the turnaround time and the ease and convenience of operation, and for that he is ready to maintain a particular level of minimum balance and pay a certain level of fee. The Indian customer is now aspirational and people are willing to pay for quality.

Which segment in retail is leading your growth?

Mortgages are registering strong growth and will continue to lead our growth. There have been some issues in the mortgage sector — some slowdown in big metros, Delhi and Mumbai in particular. But, overall, it will always be a big part of our growth. Apart from that, the unsecured businesses have been growing well for us. Our cards business has been doing very well. There is a lot going on in the credit cards business and we are  making some rapid strides.

How much growth have you seen in transactions on your mobile platform?

Mobile transactions grew at 250% y-o-y in the fourth quarter last year. I expect continued growth at this strong pace in the near future.

What are you doing to tap this growth?

We are making big investments in technology, both software and hardware. We are making huge investments in user experience as we believe customers will spend more on the mobile if the user experience is super easy. You will see cleaner versions of our app going ahead. We are putting in a lot of functionality in our mobile app and internet platform as well.

On the retail side, how much do you expect to grow, going ahead?

I would continue to expect mid-20% kind of growth in retail. I think that kind of opportunity exists.

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