We aim to double in three years: CSB MD

What are some of the changes that have you implemented after stepping into a culturally unique bank with deep roots?

We are proud of our 105-year legacy — yet we are also a 5-month-old organisation, with new IT systems propelling us into the future. 

We must keep key ratios in reasonable ranges. However, the bigger vision is building for 2030 and beyond. We are expanding wholesale, SME, and retail franchises while sustaining gold loans. In addition, we have invested significantly to build transaction banking and treasury. Sticking to product-level ROA (return on asset) is bad for the bank’s long-term risk profile and customers will not remain with us.  

We plan to launch our credit card and wealth management businesses by FY29. By 2030, we aim to be a mid-sized bank, which will require balance sheet CAGR above of 25%. On technology, we have migrated from our legacy system to the Oracle, creating an ecosystem to fuel our targeted growth.

Two years ago, you urged reducing your gold loan portfolio. But now you intend to keep it steady at 51%.

Gold loans will keep growing as it is a business we know well. Currently, we have global price tailwinds and it will be foolish to ignore when already soaring. As our top yielding product, it is tactical to use the opportunity to accelerate future goals much faster. 

By 2030, we had target an advance mix of 30% wholesale, 20% SME, 30% retail, and 20% gold.  Now, I am not holding myself to 20% gold loans as I do not know whether this incremental business opportunity is another 10% or not. Currently, about 18% of our gold loan portfolio has ticket size over Rs 25 lakh, with an average exceeding Rs 4 lakh—proving it’s no longer a mere monoline business. These customers are mainly small business owners using loans for productive purposes, which we are comfortable.  

Along with gold, we are growing in other segments as well. Wholesale is growing at more than 40% now. SME has taken a step back this year amid global issues but remains a core long-term bet in India. Overall, we are confident of 25-30% growth.

Could you elaborate on wholesale and SME banking focus? What products make clients prefer you over larger banks? 

We did not have a very good wholesale franchise before, which happened primarily in the NBFC sector. Now, we have held financial sector steady while growing corporate and mid-market via expanded coverage, relationship focus, and new products in development. Our team has grown from 10 people two years ago to 80 today. With technologies now implementing, wholesale can fully deliver end-to-end solutions including transaction banking and trade finance. 

Retail assets will ramp up aggressively from 2028 onward. For productive end-use loans, we pursue SME-style acquisition including targeting external customers via outreach, not just internal channels. Consumption loans, however, will be limited to our existing customer base. Wholesale assets will outpace retail growth until FY28 and then expect both segments to grow equally.

How do you see the competition from other lenders? 

For SME, we target customers overlooked by large banks. In retail, we are doing that 30th to 70th percentile of customers and wholesale emphasises quality corporates via solution-oriented relationships with major groups such as JSW Steel and Tata Group. On wholesale, we will compete with large and mid-tier banks. This is how we define competition.  

Retail assets will take the high-growth road, requiring massive customer acquisition -primarily via liabilities as the easy entry product. With 850 branches and adding 50 yearly, our distribution is strong—enhanced by digital transformation for convenience while maintaining physical presence through branches. 

From April 1st, with gold norm changes, how prepared are you—do you expect business growth from LTV shifts? 

As this is our bread and butter for a long time, we had interpreted a lot of these changes and had already implemented or in the process of it. Under the new norms, the RBI banned re-pledge business. We stopped this long ago, shrinking our Rs 2,200 crore portfolio to under Rs 600 crore, with full phase-out in next 3-6 months. We are not playing the LTV game and our ratio stays below 60% right now, well under the regulatory limit.