Monday, March 4, 2024

Tata launches Northeast’s first small finance bank


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GUWAHATI: North East Small Finance Bank Ltd, the first small finance bank from the region, was formally launched by Tata Trusts chairman, Ratan Naval Tata at a function here on Sunday evening.

Sources say that Tata, through his investment arm, RNT Associates Pvt Ltd, has invested Rs 40 crore in the bank.

Twenty-eight branches of the bank were declared open across Assam, Tripura, Meghalaya, Sikkim and Arunachal Pradesh.

Formerly known as RGVN (NE) Microfinance Ltd, and having started operating as a bank since October 2017, North East Small Finance Bank has enhanced its prime focus to expand its horizon by extending financial inclusion to all sections of the society, especially to the financially weaker sections to bring them under the umbrella of mainstream banking and inculcate the banking habit.

The bank plans to have its footprint across remote locations in all eight states of the Northeast by the end of the current financial year.

“We have converted 28 of the 156 branches that we had under RGVN (NE) MFL into branches of NESFB. Of the 28, we have opened three bank branches in Tripura, one in Meghalaya, Sikkim and Arunachal Pradesh and the rest in Assam. Now we plan to have 80 additional banks in a year’s time with branches in all the states of the region by March 31, 2019,” Rupali Kalita, managing director and chief executive officer of NESFB, told reporters here on Sunday.

Sixty nine per cent of the branches are located in the rural areas. The Reserve Bank had issued licence to the bank under Section 22 (1) of the Banking Regulation Act, 1949, to carry out the business of a small finance bank.

“We plan to focus on expansion in the Northeast only for now as the region is under-banked and financially excluded compared to other states of the country,” Kalita said, when asked about if there was a plan to grow outside Northeast,

Nine companies have invested in the bank, aggregating Rs 298 crore through RGVN (North East) Microfinance Ltd. The total loan portfolio was Rs 1,089 crore on March 31 this year.

So far, agriculture and allied sector has been allotted the highest percentage of loans at 39.40 per cent followed by petty trade (32.91 per cent).

Till March 2018, the bank had 521,019 borrowers, with the increase apparently substantial since March 2016 onwards when it had 291,552 borrowers.

“The bank has brought in a robust core banking system with allied supporting infrastructure and banking process. Simultaneously, we have strengthened the skill set of human resource by training the existing resource and inducting professional and experienced personnel,” Kalita said.

A small finance bank is mandated to provide 50 per cent of its business as loans (between Rs 5lakh and Rs 25 lakh) to low income groups.

The bank intends to extend its services and products to the doorstep of the customer, with the support of latest technology (handheld device) and meet the objective to become the “Doorstep Banker” offering a bouquet of products with competitive and attractive rates of interest.

Till date, the bank has recruited 1087 people who are from the region. “Our default rates are minimal. It’s less than .5 per cent,” said an official.




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