For the next 3 years, we will continue to be SFB: Ittira Davis, MD & CEO, Ujjivan SFB

The industry has seen high growth for two years, and then we had two festival months in the third quarter. Collections began to slacken a little bit. What you have seen is the effect of that. We are keeping a close watch this quarter. We are in an election year, and there are people in different parts of the country who are trying different things. You might have heard about what’s happening in Punjab; there’s a little bit of stress there for the sector. We had floods in Tamil Nadu.

We went back to the drawing board last year and put together a changed model, which we introduced this year. We have done that with MSME and housing; gold is relatively new. You will see the model working very well in FY25 and will begin to push the secured portfolio at a faster rate than FY24. We are putting in place a new LOS (loan origination system) and a new structure for the housing team. We have 16 area offices which will work like hubs and spokes. In each of these asset centers, we have business, credit, legal, and operations teams so that the TAT (turnaround time) reduces and everything can be done in a holistic manner. We have also put in a lot of oversight in terms of credit monitoring. In FY25, we should be looking at 66:33 as a split between unsecured and secured loans.

We are coming out in a new avatar with our secured products. For MSME, we’re redoing the product focus in terms of working capital against long-term and working with a couple of fintechs. We’re reintroducing vehicle loans, and it would focus on a few pockets initially to make sure that we do it well and go deep into those markets. We will focus very significantly in the next 2-3 years on our digital offering.

If the secured (book) growth is not keeping pace with the targets, we will, though if all the secured products start firing in the right direction, we may be able to delay the process a bit.

Roughly, we expect final approval from the NCLT final to take about 1-2 quarters.

We had a conscious discussion at the board level, and for the next three years, we will continue to be a small finance bank. Our aspiration is to be the best small finance bank. If we do that, we’ll find favor with the RBI for the next level. The roadmap is eventually to become a universal bank, but right now, it is further down the road.

SFBs, private banks, and even nationalized banks will have to pay slightly higher rates, irrespective of the repo rate. For SFBs, the premium over other banks is there to stay, though eventually we’d like to reduce that gap. Having said that, smaller private banks are overtaking us or have reached our deposit rates. It’s no longer a level playing field. It depends on each one’s books and requirements.

Seeking an extension (for me) is out of the question. The NRC (nomination and remuneration committee) has started the process of finding a successor. As long as the person is able to fall in line with the requirements of the organization and complies with the ‘fit and proper’ requirements, I don’t see any reason why an external person shouldn’t be roped in.