Under the partnership, IIFL, a non-banking financial company, will act as a business correspondent of CSB Bank and 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, a joint statement 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…to help the bank penetrate the under-served segments of the customers in under covered geographies of the country,” said CVR Rajendran, Managing Director & CEO of CSB Bank.
CSB Bank is one of the oldest private sector banks in India, with a strong presence in Kerala, Tamil Nadu, Karnataka, and Maharashtra through 432 branches and an overall customer base of 15 lakh in SME, retail, and NRI segments.
“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,” said Nirmal Jain, Chairman of IIFL Finance.
CSB Bank has reported a three-fold jump in September quarter net profit helped by a surge in gold loan business, where assets grew 47 per cent.
The asset under management (AUM) of IIFL Finance is over Rs 38,300 crore and it has over 2,300 branches across India, catering to about 40 lakh customers . Gold loan accounts for about 25 per cent of IIFL’s loan AUM.