New Delhi: Fairfax backed private-sector lender CSB Bank (formerly Catholic Syrian Bank), today said that it has entered into a partnership with non-banking finance company, IIFL Finance (IIFL) for sourcing and managing retail gold loan assets.
IIFL, acting as Business Correspondent (BC) of the Bank, will source new business from markets where CSB Bank does not have adequate branch network. IIFL, with its vast 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.
Speaking on signing of the agreement, Mr. C.VR. Rajendran, Managing Director & 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.”
Mr. Nirmal Jain, Chairman of IIFL Finance said, “This is a win-win partnership, which combines the strengths of the Bank’s balance sheet and NBFC’s last mile connect with the customers, to help financial inclusion of the under privileged customers in need of credit on reasonable terms. CSB Bank’s strong financial position, institutional ownership and focus on governance, makes us excited about the partnership’s potential.”
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. Recently, the bank reported a three-fold surge in profit for the quarter ended September 30, helped by a surge in gold loan business, where assets grew 47%.
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.