Chairman’s Insights

Taking confident strides
into an inclusive future

Chairman’s Insights

Taking confident strides
into an inclusive future

In FY20, esfb sustained its growth momentum, despite a set back to depositor confidence due to worrying events in certain co-operative and private sector banks and a slowing economy.

Dear Stakeholders,

It gives me great pleasure to present to you the first Integrated Annual Report of Equitas Small Finance Bank (ESFB), which outlines our progress towards building a stable, scalable and sustainable Bank. We have mapped our accomplishments against our strategic objectives, which also incorporate a commitment to excellence through fair and transparent practices.

In FY20, ESFB sustained its growth momentum, despite a set back to depositor confidence due to worrying events in certain co-operative and private sector banks and a slowing economy. Before these shock waves could dissipate, the country was drawn into the struggle against a worldwide pandemic without parallel in terms of spread, speed and economic impact.


India was undergoing a slowdown with muted private consumption and contraction of manufacturing and private investments. The Government announced a series of measures to revive the economy. The efforts on the fiscal sides were complemented by a series of measures by the Reserve Bank of India to lower the costs of borrowing, improve liquidity, and stabilise asset quality. Despite these measures, India recorded its slowest growth in over a decade at 4.2% (Source: Central Statistics Office).

The Corona virus outbreak and consequent disruption to economic activities wilted the few green shoots of recovery. The Central Government in coordination with State Governments imposed a nationwide lockdown to break the chain of virus transmission. A cumulative stimulus package of `20 trillion was announced to soften the economic impact and provide an impetus to self-reliant revival.

Equitas has kept most branches open and ATMs operational from the onset of the lockdown phases to deliver timely and quality banking services to constituents, at the same time according great importance to the health and safety its employees spread over 15 States. As a technology-driven new age Bank, ESFB has seamlessly adapted to the new normal of conducting business activities and by a mix of employees working from office and home has been serving customers without disruption.


In FY20,

  • Advances and deposits excluding CD grew at 31% and 26%, respectively, a reaffirmation of the untapped potential of the segments the Bank operates in
  • Unsecured portfolio fell from 29% in FY19 to 25% as of FY20
  • Tamil Nadu loan concentration reduced from 57% in FY19 to 54% in FY20
  • Retail deposits grew by 133%; over 4.5 lakhs micro finance customers opened recurring deposits

Our strategy to create a long-term, granular retail liability franchise continues to work well. We saw retail deposits touch `3,811 crores with overall deposits including
CD touching `10,788 crores. We also launched Equitas Elite, a priority banking and wealth management programme that comes with unmatched features and benefits. The initial response has been quite encouraging with about 6,200 customers enlisting in a short span of time.

On the advances side, our primary focus is to diversify our product offerings while growing our secured loan portfolio. We plan to continue to develop and offer a comprehensive range of products anchored around the unserved and underserved customer segments, which while attracting new customers will deepen our relationship with the existing customer base. Small Business Loans such as Micro LAP (Loan Against Property), General LAP, and newer products like Secured Business loans registered strong growth during the year. Small Business loans grew by 37%, Micro Finance by 18%, Used Commercial Vehicles by 16% while younger portfolios like MSE Finance and New Commercial Vehicles grew by `489 crores and `443 crores, respectively.


We are leveraging our front-end technology platforms to further improve customer acquisition and transaction management. The objective is to make it easier for customers to manage their accounts, while facilitating significant crossselling opportunities for a wider range of products, thus building on our existing relationship with our customers.

We also plan to develop digital platform-only products, specifically designed for the younger and technologically savvy customer base. Our endeavour is to empower customers to access various products and services on their own and raise our efficiency. We are in collaboration with some of the best technology companies to enrich our digital journey.


Our social initiatives continue to create a meaningful and significant impact. During the year, we continued to conduct free health camps, livelihood skills training and job placement initiatives for unemployed youth. Our seven Equitas Gurukul schools with a student base of over 5,000 and staffed by very dedicated teachers continue to provide high quality affordable education to the poor. Gurukul students do make us proud by excelling in educational achievements and extracurricular pursuits at the District, State and National levels.


Growth in retail deposits


In the recent past, the COVID-19 pandemic has had a deep and lasting impact both on the global social and economic orders. The world seems still in the early stage of fighting this pandemic and any present assessment of its tectonic impact on various fronts would perhaps be premature. However, the Bank is committed to support its customers in these economically trying times, has, and will do whatever is possible to ensure safety and to sustain the morale of its employees. The final impact of this virus on the performance and financials of the Bank would be clearer as we go through the rest of the current year. You have my assurance that the Management and the Staff of the Bank are ready to walk beyond the last mile to ensure optimal delivery of expectations to our stakeholders.


Every Year that passes affords learnings and every New Year that rolls in is often replete with opportunities to stretch our perception of excellence, to stoke our hopes to ascend higher, to extend our reach with empathy, responsibility, fairness and transparency. If this incessant journey of self-renewal has to lead to greater levels of service, competence and shared prosperity, the Bank would need to unstintingly support you all and in turn be strongly supported by you all. We move into the future with optimism and fired with this conviction.


Part-Time Chairman and
Non-Executive Independent Director