Axis Bank aims to ensure meeting its priority sector lending targets organically and has partnered with technology-based company PayNearby to boost its credit growth in the segment.
“The focus is to grow at a faster clip than the rest of the market and the rest of the branch network. It is one of the top three priorities for the bank and Bharat Bank is one key initiative that the bank is pursuing,” Munish Sharda, head of Bharat Banking at Axis Bank said at the event. “There are some strategic purposes which we are doing this. We think we have an opportunity to get a higher share by a reasonably focused approach in these markets,” he added.
Banks are required to extend 40% of their overall lending to priority sectors, which include loans to agriculture and MSME sectors. In case of a shortfall, banks have to take on loans under this category from other lenders. The bank, however, did not divulge specific numbers on any targets set by it through this initiative.
PayNearby, which offers distribution-as-a-Service (DaaS), has a network of over 50 lakh micro-entrepreneurs. Axis Bank will leverage the network for providing financial solutions, including savings and current bank accounts for both last-mile retailers and customers.
Through this tie-up, Axis Bank will be able to reach out to potential customers in remote regions and provide banking solutions digitally. This will simplify banking for retail shop owners and individual customers, and further eliminate the need for them to travel long distances to operate their bank accounts. As of now, Axis Bank has about 2,100 branches which are classified as Bharat Bank branches.
“With this partnership, we continue to empower our retailers and customers while improving the reach of Axis Bank in the remote hinterlands of the country,” said Anand Kumar Bajaj, MD & CEO of PayNearby.
However, the bank is not looking only at geographical remoteness while offering Bharat Banking solutions. Loans under affordable housing or a microfinance customer in any market is a Bharat Bank customer, Sharda said.