Ujjivan to open 100 branches to meet small bank licence norms
Microfinance firm Ujjivan Financial Services Ltd, which launched a Rs.885 crore initial public offering (IPO), will open 100 bank branches to meet the regulatory norm for a small bank licence.
“We need to have 25% of bank branches in unbanked areas. Currently, we have none. Due to operational factors our existing branches are mostly next to PSU (public sector undertaking) bank branches. We propose to set up about 100 branches in unbanked locations,” Ujjivan managing director and chief executive Samit Ghosh told PTI.
He said the identification process for such new branches had begun and the company which would become the holding company for the proposed Ujjivan Small Bank would meet the criteria once the bank is launched.
Ghosh had said the bank would be launched by April 2017. Another requirement which Ujjivan has to fulfil is to bring down the foreign holding to 49% or lower.
“According to regulatory requirement, the foreign holding in the small bank has to be less than 49%. IPO is the first step towards transformation to a small bank. Foreign shareholding has come down to 77% following a pre-IPO placement. The IPO will help reduce further to 44-45%,” Ghosh said.
Ujjivan has about 11.15% market share of the non-banking financial company and microfinance institution sector in the country with some 470 branches spread across 24 states.
“The entire business will be moved to the bank. Some 40% of our existing 470 branches spread across 24 states will be brought under the bank branches in the initial phase,” Ujjivan strategy executive Rajat Singh said.
Ujjivan officials said the staff strength will be increased with the proposed small bank licence to around 10,000 from 7,862 employees.
Source:BankingUpdates
No comments:
Post a Comment