Seeking to cut down its operating costs and leverage from an expanded branch network, the country's top private sector lender ICICI Bank has decided to source two-wheeler loans only through its branches and not at the dealers' end.
Accordingly, the bank has moved over 200 employees from its two-wheeler team to other growth businesses such as auto loans, home loans and SME businesses, ICICI Bank Executive Director V Vaidyanathan said in Mumbai.
When asked about the rationale behind the move, Vaidyanathan said, "We have doubled our branch network from 750 in 2007 to over 1,400 in 2008. We therefore now have the distribution required to reach out to our target population."
The move to originate two-wheeler loans only from the branches would provide the bank an "opportunity to get better quality of credit, reduce our operating cost, and leverage our branch structure better," he added.
Currently, the bank's two wheeler loans constitute just about two per cent of its total retail business portfolio and accounts for nearly Rs 2,000 crore.
The lender's total retail portfolio is more than Rs 1,30,000 crore.
Vaidyanathan said that retail banking has been the cornerstone of ICICI Bank's growth over the last decade and its retail business balance sheet of $35-billion accounts for over 55 per cent of the bank's funded assets.