Private-sector lender CSB Bank (formerly Catholic Syrian Bank) had joined hands with IIFL Finance to provide gold loans in untapped locations, covering the rural areas. Under the partnership, IIFL Finance, a non-banking financial company, will perform as a business correspondent of CSB Bank and will derive new business from markets where CSB Bank does not have sufficient branch networks.
CSB Bank has announced a three-fold jump in September quarter net profit accompanied by an increase in the gold loan business, where assets expand to about 47 percent. The Asset Under Management (AUM) of IIFL Finance is above Rs 38,300 crore and, it has more than 2,300 branches across India, serving almost 40 lakh customers. As per the new arrangement, gold loan accounts for around 25 percent of IIFL’s loan AUM.
Gold loan is the core business driver for CSB bank. They seek to serve individuals who are either under-banked or unbanked. IIFL Finance, with its extensive branch network, would assist CSB Bank to get into the bottommost strata of customers and rural areas, where the bank currently does not have enough outstretch. This robust technology will help the bank to maintain a hold on the under-served segments of the customers in under-covered geographies of the country. As per the united statement given by CSB Bank and IIFL, this arrangement would result in scaling up of their customer base.
CSB Bank is one of the matured private sector banks in India, with a dominant presence in Kerala, Tamil Nadu, Karnataka, and Maharashtra through 432 branches and overall end-users of 15 lakh in Small and Medium-sized Enterprises (SMEs), retail sector, and Non-Resident Indian (NRI) segments. IIFL Finance is one of the biggest self-reliant full-service retail and institutional broking house. It is also a major investment advisory firm in India offering heterogeneous financial services and products to corporate, institutional investors, foreign portfolio investors, mutual funds, insurance companies, alternative investment funds, trusts, high net worth individuals, and retail clients.
Therefore, the alliance of these strong financial service providers will be a great success. This is a win-win partnership, which unites the power of the bank’s balance sheet and Non-Banking Financial Company’s (NBFC’s) last-mile connection with its customers. Thus it helps in the financial inclusion of the underprivileged customers who need credit on reasonable terms.