RBL Bank, which has seen a slow growth in liabilities, is set to offer attractive interest rates on deposits to raise CASA deposits by up to 40% as it distances itself from volatile bulk deposits.
R Subramaniakumar, Managing Director, RBL Bank told ET, “We are relaunching our gold loan product, we are expanding our small business loan portfolio. “We have launched tractor finance, we are expanding to two wheelers and four wheelers. We are also targeting big on used car capacity, which can grow at a CAGR of 35 to 40% over the next five years. ”
Subramaniakumar said that the bank will make significant inroads into new towns and cities through its digital channels.
“As our strategies align with the expected growth in the economy, we will move to Tier-II and Tier-III cities, where we will be able to utilize the digital channel with the aim of increasing our penetration in these segments,” he said.
In June, the Reserve Bank of India approved the appointment of public sector banker Subramaniakumar as the new head of RBL Bank for three years.
The bank came under RBI scrutiny in December 2021, following which the regulator appointed its chief general manager Yogesh Dayal as an additional director on the bank’s board for a period of two years.
It was speculated that the central bank is uncomfortable with heavily unsecured assets and poor compliance with its directives.
Subramaniakumar, who has now spent more than 3 months as CEO, said he is completely comfortable with the books of the bank.
“It’s been three months as CEO and I haven’t found any weakness in the bank,” he said. “As a team we have decided that there are certain takeaways from past events. The impact of the pandemic eroded the bank’s balance sheet due to exposure to credit card and microfinance related industries. So now our strategy is to have multiple such products. Which will give good returns and keep the balance sheet stable.
He added that the bank will use a number of asset-side products to run off our liabilities.
“We have a pretty good liability base with a strong contribution of Rs 2 crore and below. It is in the range of around 38%, we plan to go up to 42%,” he added. “CASA has gone into the range of 36% which will continue to grow at 2% per annum. We have to empowerment Branches with certain asset products, to receive additional fine deposits at the branches.”
Subramaniakumar said to continue the strong credit card relationship with the bank Bajaj Finance, zomato and BookMyShow, the credit card team will soon launch new partnerships, which will include 2 tie-ups each quarter.