The Fairfax backed private-sector lender has entered into a partnership with non-banking finance company, IIFL Finance (IIFL), for sourcing and managing retail gold loan assets.
IIFL Finance, acting as business correspondent of CSB Bank, will source new business from markets where CSB Bank does not have adequate branch network. IIFL Finance, with its branch network, would help CSB Bank penetrate the lower strata of customers and rural areas, where the bank currently does not have adequate reach. This arrangement would result in scaling up of the customer base, the bank said in a statement issued during market hours today, 27 October 2020.
Speaking on signing of the agreement, C.VR. Rajendran, the managing director (MD) and chief executive officer (CEO) of CSB Bank, said: "CSB Bank endeavours to serve individuals who are either under-banked or un-banked. Gold loan is the core business driver for the bank. IIFL Finance with its extensive branch network, robust technology and more than a decade's experience in gold loan business, is the ideal long-term partner, to help the bank penetrate the under-served segments of the customers in under covered geographies of the country."
Shares of CSB Bank were down 2.22% to Rs 225. Shares of IIFL Finance were down 0.06% to Rs 78.
CSB Bank is one of the oldest private sector banks in India, with its strong presence in Kerala, Tamil Nadu, Karnataka, and Maharashtra through 432 branches and an overall customer base of 1.5 million in SME, retail, and NRI segments.
IIFL Finance with over Rs 38,300 crore of assets under management (AUM) is present across India through an extensive network of 2,372 branches in over 600 cities across 25 states and cater to about 4 million customers. About 90% of its loans are retail in nature and more than 40% are priority sector lending compliant. Gold loans account for about 25% of IIFL's loan assets under management.
Powered by Capital Market - Live News
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU