Microlender-turned-universal bank Bandhan today said it has sold Rs 500 crore of its loans qualifying as priority sector lending (PSL) to different banks wanting to meet the mandatory 40 per cent target.
"We have also been doing IBPC (interbank participation certificates). This is alternative to securitisation... We have done Rs 500 crore till now," the newly started bank's managing director and chief executive C S Ghosh told reporters here.
He said courtesy its legacy in the micro-finance space, its entire book of over Rs 11,500 crore qualifies for PSL and banks staring at a shortfall in their targets have an appetite for such folios.
An IBPC is a form of securitisation through which a bank buys others' assets for a stipulated period, taking the credit risk of the folio which is bought. Under PSL norms, banks are required to lend 40 per cent of their overall resources to areas specified as a priority for the development of the country.
Generally, banks, which rely on corporate or wholesale credit are unable to meet the target.
Ghosh said the loans have been sold for a 180-day period, but declined to specify the pricing details.
He also declined to give a target for IBPC play during the fiscal, saying it depends on a lot of factors including its own deposit and credit growth.
Ghosh said the bank has been able to collect over Rs 5,000 crore in deposits since its launch in August this year, while the lending book has grown by Rs 1,500 crore.
Much of the new loan demand is coming from existing borrowers who have had an association with Bandhan since its MFI days, he said, adding that many of these have graduated to being small enterprises from being micro ones, which has also helped the bank increase its average loan ticket to up to Rs 35,000 now.
It plans to grow its loan book to Rs 13,000 crore by the end of the fiscal.
He said it is focusing on reducing the debt it had taken as a MFI and plans to get it down to Rs 7,000 crore in the end of the fiscal from the Rs 9,000 crore level during the start of banking operations.
He said the capital adequacy for the bank stands at 42 per cent at present, which is the highest among any lenders. The capital will suffice the bank for at least 2-3 years, Ghosh said, adding that the plans for IPO by the mandated 2018 are on track.
