Suryoday Small Finance Bank has rolled out a working capital product with a small overdraft (OD) limit on a pilot basis in two branches – Trichy (Tamil Nadu) and Cuttack (Odisha) – to help its customers meet the urgent liquidity requirements during the lockdown.
To begin with, the bank has set a limit of ₹5,000 for this working capital product. But this could be increased anytime. The bank plans to scale up the number of branches offering this product to 100 in no time if it sees good traction.
“If an existing customer wants this limit, he can get it sanctioned in one go from our branches, based on his requirement. We are not saying we will give ₹10,000 or ₹20,000. We are setting up a limit.
“For example, if a customer wants only ₹2,000, he can take that, be comfortable. But the limit available is ₹5,000. So, he can avail the balance ₹3,000 whenever he wants,” said Baskar Babu R, MD and CEO.
Babu emphasised that at 15 per cent, the interest rate on this product is lower than the bank’s regular microfinance loan, which is all about doorstep delivery to service the customer.
“To that extent the cost of acquiring customers and servicing them is incrementally very low. The intent is to not look at profit at this point of time on the incremental loans.
“It is to ensure that customers immediate financial requirements are met…. It is not that all products have to be priced high,” explained Babu.