RBI Issues Small Finance Bank Licence to ESAF

Destination-Kerala-ESAF

Thrissur: Thrissur-based ESAF Microfinance has received the final approval from RBI to launch Small Finance Bank (SFB).

The new SFB is expected to start operations by the first quarter of 2017.  The final licence was issued the other day by the RBI, according to an ESAF statement.

ESAF will be the first bank to be given a banking licence in Kerala since independence.

This will give ESAF the confidence to move deeper and wider to serve people at the bottom of the pyramid, said K Paul Thomas, Chairman and Managing Director, ESAF Microfinance. Through outstanding service and state-of-the-art the technology ESAF can serve them better, he added.

The new bank will face an increase in expenditure owing to infrastructure development and HR requirements. In course of time, the cost of funds will come down and the benefits can be passed over to the end customers, added Paul Thomas.

Currently, ESAF Microfinance has around 3,000 employees and by March 2017, it will be increased to 3500. The bank will have presence in urban, semi urban and rural areas. On the day one, the bank will be launched in Kerala and Tamil Nadu and gradually it will be expanded to other parts of India. ESAF has plans to give special focus to the North Eastern parts of India.

ESAF will offer multiple channels to the clients to access accounts, including digital channels like mobile and internet banking, apart from services through branches. The company has invested around Rs. 20 cr so far in IT. FIS Global has been engaged as the system integrator for the project and E&Y as the principal consultant for the banking transformation. The company is hoping to improve operational efficiency and risk management through technological initiatives.

At present, the organisation has presence in 11 states. The company, which has 1.2 million clients at present, has plans to reach 3 million households by 2020.

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