By Kshipra Petkar
Jana Small Finance Bank, which has recently cut deposit rates for some tenures to 7.75% from 8.05%, is expecting margins to moderate by 20-30 bps, said MD and CEO Ajay Kanwal. It is also aiming for loan growth and deposit growth of 20% for the current financial year, said. Kanwal expects this loan growth to come largely from the secured book.
He added that the bank has been trying to reduce the bank’s unsecured loan book for some time and intends to bring it down from 30% at present, to 20% in the next 24-36 months.
“The hard years are behind us,” he said. The cost of funds is also expected to go down by 10-25 basis points in FY26.
As on March 31, advances were up 19.4% on year to Rs 29,545 crore and the deposits were up 29% on year to Rs 29,120 crore, as per the investor presentation. The net profit of the small finance bank stood at `501 crore for the financial year ended March. He expects a profit growth of 25-30% going ahead.
Looking at the loan mix, he said that all segments except microfinance are doing much better than last year. “I still think we will become more secure than we began the year. I think MFI will see flat growth this year for us at best. Because I can’t see how it can pick up suddenly,” he said. Kanwal said that the stress in microfinance segment would change the way people look at the model. “MFI stress has been going on for over a year. People will not ignore it now, which I think is a good sign.
The bank had already put 28% of their microfinance book under the Credit Guarantee Fund for Micro Units and Credit Guarantee Fund Trust for Micro and Small Enterprises. The bank plans cover the entire microfinance book under the guarantee schemes by the end of the year.
In March, RBI granted the authorised dealer category-I license to the small finance bank to carry out foreign exchange operations. “All the work for Nostro and Swift is going on. I think by October, all systems will be set because there is a lot of work which happens after the license comes. Fully engaged on that,” he said.
On June 9, the small finance bank had submitted its application to the RBI for a universal bank license. Kanwal said that the first thing he plans to do after getting the license is rebranding and marketing and then in terms of products focus more on the MSME segment.
“By that time my AD-1 license will be ready. I will start doing more trade business for MSMEs,” Kanwal said. He also said that they are working on credit line on UPI, and they plan to come out with it by this financial year.