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    This Kerala-based lender does not want gold loans to be major part of its book by FY30

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    This Kerala-based lender does not want gold loans to be major part of its book by FY30

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    CSB Bank expects retail loans to comprise a major part of its loan book by FY30, adding that gold loan book is doing well.

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    Kerala-based & Fairfax-backed private lender CSB Bank does not want gold loans to constitute a major part of its loan book by the end of this decade. In an interview with CNBC TV-18, the bank's newly elevated MD & CEO, Pralay Mondal said that by FY30, most of the bank's loan book would come via retail, even as gold remains an integral part.
    During the April-June quarter of the current financial year, gold loans constituted nearly 42 percent of the bank's overall advances and increased 26.3 percent year-on-year. On the other hand, the overall retail loans declined 14 percent from the same period last year.
    Mondal aims to grow the retail book by launching new products within the banks and via partnerships. It plans to launch credit cards next month via partnerships while already engaged in a home loan partnership with HDFC. "The next 12-18 months will be a build phase and 18 months onwards we will see a lot more growth on the retail side," he said.
    By FY30, the bank aims to have 30 percent of the book via retail, 20 percent each via retail and SME, while the other 30 percent will be from other businesses, including wholesale.
    Shares of CSB Bank recently hit a six-month high after the Reserve Bank of India approved the appointment of Mondal as MD & CEO for three years. Mondal joined CSB Bank in September 2020 and had been the bank's interim MD & CEO since the start of the new financial year in April.
    Fairfax owns nearly 50 percent stake in the private lender as per its June quarter shareholding pattern. Mondal believes the bank is in Fairfax's larger scheme of things despite them dealing with a vast portfolio. He also said that the conversations with the promoters are primarily regarding how to grow the bank organically.
    While Mondal refused to comment on Fairfax's plans concerning India's banking sector, he ruled out any inorganic growth plans as of date. "At this point of time, we have no plans to acquire any bank," he said.
    Other Key Takeaways:
    • Change in loan-to-value ratio has been navigated well
    • Gold prices will remain under pressure globally
    • Credit growth will be faster than the system in the next 2-3 years
    • Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
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