Loans other than microfinance now account for 10% of Suryoday Small Finance Bank's portfolio, managing director and chief executive officer R Baskar Babu told Shritama Bose. The bank has seen a 225-basis point drop in its cost of funds since it received scheduled-bank status in September 2017, he added. Edited excerpts: What kind of growth have you seen in assets and liabilities in the last one year since you launched the bank? We have got close to Rs 600 crore of deposits in the last one year. Around 40% of that is retail and 60% is bulk deposits. Approximately 10% of the deposits currently is CASA. In year one, we have been focusing more on retail fixed deposits to build up a base and over a period of time, we will get into CASA. So, year one was not CASA-focused, but more focussed in terms of retail term deposits. You received scheduled-bank status in September. How much has that led to a reduction in your cost of funds? Overall cost of funds has come down 225 basis points (bps). Yields in bond market have hardened. What has been the net effect for you? There has not been much impact because all our borrowings have been in terms of fixed deposits. We haven\u2019t increased our pricing on fixed deposits because there was already a differential between us and what other banks are offering to the tune of around 150 bps. The differential has shrunk, probably by 50 bps or 75 bps, but since there is a differential, we are staying neutral. We have neither increased it nor reduced it. If the yields had not hardened, we would probably have reduced our fixed deposit pricing a little bit \u2013 by 25 bps \u2013 maybe around January, which we have not done. What is the update on branch expansion? We currently have 24 bank branches fully operational and we have 216 microfinance branches, which are doorstep service centres. We\u2019ll be converting all 216 by March 2019 and we\u2019ll be putting additional branches. We\u2019ll probably have something closer to 450-500 banking outlets by the end of FY19. We will be putting in close to 50 branches in the first quarter, then probably 100 in the second, 100 in the third, and the remaining 150-200 branches in the fourth quarter. We will also be doing the conversion of the 216 into banking outlets from doorstep services, which are nothing but our microfinance branches. Beyond microfinance, which are the other lending products you are offering? We have started small-ticket loans for shopkeepers and we have also started loan against property for business and affordable home loans. These are the three products. Currently, they constitute around 10% of the portfolio. So, to that extent, it is pretty satisfying that in one year, they have moved from close to 0% to around 10% of the overall portfolio. It is likely that it will be around 20% of the overall portfolio as non-JLG (joint liability group) lending by year two. That said, we are not really looking at reducing the microfinance portfolio by an absolute amount. It\u2019s just that growth in the non-JLG, since it\u2019s a very small base, to start with, will be much higher. What are the interest rates for affordable housing loans? Currently it is in the range of 12-12.5%, and we are at the top end of the affordable segment now. So we are getting good-quality affordable housing customers. What is typically the ticket size? Around Rs 10-11 lakh of now. You are planning a rights issue. When are you likely to go ahead with it and how much will you raise? We are planning to raise Rs 200-250 crore. Whether it is going to be a rights issue or a preferential issue is yet to be decided, but we are planning to raise this much by the second quarter of the next financial year. We are very well-capitalised. Our capital adequacy is 45%. We are raising funds for growth next year and we are expecting growth of around 70-80% for the full year on the loans side. What is the current delinquency ratio of the portfolio? Gross NPA is 7.2%. We have provided for 51% of that. So net NPA is 3.6%. When are you planning to float an IPO? As per regulatory requirements, we have to do our IPO before March 31, 2020. It is likely that we will do it a couple of months before that.