It has opened three branches in Uttar Pradesh. Last week, it entered eastern India by opening a branch in Kolkata.

AU Small Finance Bank, which saw its overall collection efficiency getting back to near pre-Covid levels, will focus on vehicle and MSME loans to grow its loan book as the lender is expanding presence in southern and eastern parts of the country.

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Until recently, the Jaipur-based SFB had no presence outside western and northern India. In its pursuit of becoming a pan-India player, the bank forayed into south India in August and commenced operations in Bengaluru. It has opened three branches in Uttar Pradesh. Last week, it entered eastern India by opening a branch in Kolkata.

“We have decided that we will have a pan-India presence. We will open a branch in Bhubaneswar this month. A new branch in Hyderabad will come up. And, by the first quarter of the next financial year we should be present in all the major state capitals. We will be present in Ranchi, Patna, Chennai, Visakhapatnam, Kochi and Guwahati. One more branch in Kolkata will also be launched,” said Rishi Dhariwal, group head, Branch Banking.

Currently, the bank has as many as 382 full fledged branches and over 710 banking touchpoints.

Of the total full fledged branches, roughly 72% branches are in North, while 26% branches are in West. Notably, around 45% of its branches are in Rajasthan. By June next year, the bank is planning to open 45-70 new full fledged branches across the country, and over 25% of these may be launched in the new geographies.

Notably, around 70% of the bank’s deposits now come from Maharashtra, Rajasthan and Delhi, while around 81% of its loan book is from Rajasthan, Madhya Pradesh, Maharashtra and Gujarat.

Dhariwal said the bank’s overall collection efficiency was getting back to near pre-Covid levels. “Collection efficiency touched 96% at the end of the second quarter this fiscal, while during the same period last fiscal it was 98%,” he said. In the month of October, collection efficiency was better than the September figure.

With the three-and-a-half years old bank venturing into new states, it will focus mainly on vehicle and MSME loans to grow its asset side. “Vehicle loan is mainly for cars and small commercial vehicles. Our vehicle loan segment is doing really good in this festive season. We have come back to around 85% of our pre-pandemic levels for vehicle and MSME loans,” Dhariwal said.

The bank needed to have a pan-India presence for customer acquisitions in new geographies as well as to allow its existing customers to get services in the new locations, he pointed out. On liability side, its customer acquisition strategy mainly centres around attractive savings account rates.

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