Axis Bank to collaborate with PayNearby to increase lending to key sectors

8 Sep 2022 , 09:08 AM

A top executive of Axis Bank stated that such alliances will help the private lender achieve its lending goals for key sectors on Wednesday as the company announced a collaboration with branchless banking network PayNearby.

If there is a gap in meeting our own company’s priority sector objectives, we must make up the difference using PSLCs (priority sector lending certificates) or another method. It is making sure we comply with the bank’s criteria,” said Munish Sharda, group executive and head of Bharat Banking.

By utilizing the distribution-as-a-service network of 50 lakh micro enterprises provided by PayNearby, Axis Bank hopes to organically reach its lending goals for its key sectors. According to a news release, the partnership would be utilized to open current and savings accounts for retail and individual clients in distant locations. According to Sharda, “We are looking at the penetration in these areas, followed by the loan growth rates that we are obtaining, and finally the cost at which we are purchasing.”

According to Reserve Bank of India standards, the priority sector, which includes agriculture and micro, small, and medium-sized businesses, should get 40% of net bank credit.

How many of PayNearby’s 50 lakh micro-enterprises will be joined by Axis Bank as a result of the relationship was a question Sharda would not answer. According to Sharda, the onboarding of these businesses will follow Axis Bank’s internal checks and balances, and the bank’s logo would be displayed at retail establishments.

At the conclusion of the first quarter of the current fiscal year, Axis Bank’s portfolio of rural loans was Rs58,800 crore, up 4% over the previous quarter.

According to Sharda, out of Axis Bank’s 4,759 branches, 2100 are designated as Bharat Bank branches. The lender’s goal is to develop more quickly than the industry as a whole and the rest of the market. It is one of the bank’s top three goals, and one important project it is undertaking is Bharat Bank. In the medium to long term, it must be substantial and lucrative for the bank. We are doing this for various strategic reasons, he claimed.

In these markets, he asserted, “We believe we have a chance to obtain a greater share by taking a pretty targeted strategy.” The Bharat Banking business saw annualized loan growth of 18% while contributing to 25% of additional retail disbursements, according to a statement posted on the Axis Bank website in September 2021. The rural deposits also increased over the prior year by 19%.

Sharda declined to share numbers, only stating that the traction exhibited in the Bharat Banking area so far this year had been positive. As of June 30, 2022, Axis Bank had loans at Rs701,130 trillion, up 14% from the previous year, and deposits worth Rs8,03,572 trillion, up 13%.

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