YES Bank is currently working towards establishing microfinance business within bank by FY25: CEO

Hyderabad, Mar 16 (UNI) India’s sixth largest private sector bank, YES Bank, which is struggling to meet priority sector lending (PSL) targets, is exploring the option of continuously acquiring a microfinance Institution (MFI).

Basically, we are exploring the option to acquire a microfinance institution continuously, but at the same time, we are also working in terms of doing the microfinance business within the bank by the financial year 2025, said YES Bank Managing Director and CEO Prashant Kumar in a press conference here on Friday.

Without elaborating further, he said that our focus is on Tier 3 and Tier 4 cities, and it shall be PAN India.

Several banks have taken the MFI acquisition route, as such transactions allow them to scale up operations in the rural and semi-urban markets.

Focusing on the MSME segment, he said that our bank’s portfolio in small-and-medium-enterprise loans and mid-sized corporate loans was 30 percent and will be increased to 35 percent. Our bank’s gross NPA is 2 percent.

We would not like to go for higher deposit growth by offering higher rates,” Kumar said, adding they would also not grow loans by offering a lower rate of interest.

Focusing on five southern Indian states, where 216 branches exist, he said that we are planning to expand further in the foreseeable future.

Presently, the bank operates 34 branches in Telangana, of which 25 are in Hyderabad alone. He said the branches in Hyderabad will scale up to 29 by the end of March, marking a significant milestone in its journey of growth and commitment to the southern region.

Over the last couple of years, the bank has experienced remarkable success in Hyderabad, evident from its expanding customer base and robust financial performance. As of December 2023, YES Bank has garnered a substantial customer base of approximately 2.64 lakh liability customers in Hyderabad, showcasing an impressive growth of 30% year-on-year.

The bank’s liability deposits have surged by 16.6% year-on-year, reaching INR 8,887 crore, positioning Hyderabad as one of the top-performing cities in terms of deposit growth within the southern region. Additionally, total gross advances for the bank in Hyderabad witnessed a significant uptick of 24%, amounting to INR 11,157 crore, underscoring the city’s increasing credit needs and YES Bank’s commitment to fueling economic growth, the CEO informed.

The Bank’s robust performance in Hyderabad is further highlighted by its strong CASA performance, with balances standing at INR 1,837 crore as of December 2023. The city accounts for 14% of the total CASA deposits in the southern region, emphasising the significance of Hyderabad in contributing to YES Bank’s overall deposit base.

Moreover, the Bank witnessed a notable 14 percent year-on-year increase in new-to-bank CASA accounts, showcasing strong customer engagement and satisfaction, the bank said in a release here.

In addition to branch expansion, YES BANK remains dedicated to empowering MSMEs through its innovative digital banking solutions.

The YES MSME platform provides a comprehensive suite of services, including cash flow management, credit facilities, and online banking transactions, catering to the diverse financial needs of small businesses.

Furthermore, YES Bank’s SME and Wholesale Banking segments have garnered a strong customer base in Hyderabad, comprising large conglomerates, emerging corporates, cooperative banks, and NBFCs, the release added.

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