new Delhi,India – Capital Small Finance Bank (CSFB) has indicated it is not currently pursuing a global banking license,prioritizing growth within its existing framework,according to Managing Director and CEO Sarvjit Samra. This decision comes as the bank continues to strengthen its financial position and expand its retail focus.
“We aspire to be a universal bank one day, but at this moment, we think that we first wont to grow in this avatar,” Samra stated, outlining a phased approach to expansion.The bank is nearing fulfillment of the requirements for a universal banking license, with a net Non-Performing Asset (NPA) ratio of 1.4% as of June 30. This figure is a key metric for eligibility.
CSFB aims for a 20% growth in its loan book for the current financial year. Deposit strategies will center on attracting current account, savings account, and retail deposits. Recent interest rate adjustments by major banks like State Bank of India (SBI), HDFC Bank, ICICI Bank, and Canara Bank are influencing deposit trends nationwide, and CSFB is adapting its approach accordingly.
Authorized Dealer-1 License Submission Paused
The bank has also put on hold its application for an Authorized Dealer-1 (AD-1) license, choosing to first bolster its foreign exchange (forex) business. Despite increased provisions, CSFB reported a net profit of Rs 32 crore for the June quarter, a slight increase from rs 30.02 crore in the same period last year.
“We still have not applied for AD-1 license. We are evaluating it, there is no timeline as of now,” Samra explained. Previously, in 2023, the bank had announced plans to apply “shortly.” Executive Director Munish Jain clarified the delay, stating, “We are able to deliver a profit of Rs 1 crore from the forex business. at this stage, we are strengthening our capabilities and increasing the customer outreach with AD-2 facilities.”
Retail Banking as a cornerstone Strategy
The AD-1 license is particularly crucial for banks heavily involved in trade finance or corporate lending. Given Capital SFB’s core focus on retail banking and serving middle-income customers, the immediate need for an AD-1 license is less pressing. “Obviously, onc we have that kind of business segment, we will require to go that direction,” Samra added.
This strategic decision reflects a broader trend among small finance banks in India, which are increasingly focusing on niche markets and specialized services to achieve sustainable growth. Capital SFB’s commitment to retail banking positions it to capitalize on the growing demand for financial services among India’s expanding middle class.
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