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Monday, December 23, 2024 | 07:40 AM ISTEN Hindi

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Swadhaar buyout to support RBL Bank's retail plans, regulatory needs

An established branch network in rural areas will help the bank sell its retail products, and improve priority sector lending in a cost-effective way

RBL Bank
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Vishwavir Ahuja, MD and CEO, RBL Bank at a press conference in Mumbai (Pic: Suryakant Niwate)

Shreepad S Aute
After a strong performance in 2017-18, investors have given a thumbs-up to RBL Bank’s move to hike stake to 100 per cent from the current 60.5 per cent in Swadhaar Finserve, which offers services in underbanked areas.

Since the announcement on June 28, RBL’s stock has gained about five per cent, outperforming the 0.4 per cent rise in the Nifty Bank index.

The deal is unlikely to boost RBL’s loan book directly since Swadhaar (the bank’s business correspondent), was sharing its entire loan book (Rs 20 billion as of March) with RBL even before. Even so, there are synergies to benefit from.

“The

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