ESAF Microfinance launches small finance bank

The bank, promoted by ESAF Micro Finance and Investments (P) Ltd, was launched by Chief Minister of Kerala, Pinarayi Vijayan. The bank’s ATM cum debit cards, digital banking platforms including website were launched during the function.

ESAF, the first Small Finance Bank from Kerala, is planning to open 85 branches across the country in the first year, of which RBI approval has been obtained for opening 15 branches on the inaugural day.

All the branches are full-fledged retail branches and will start operations from next week. As per the RBI guidelines, the bank is required to open 25% of the branches in unbanked rural centres. The first 15 branches will be opened majorly at such locations and also in the major centres in Kerala.

The Bank is also planning to open branches in Metropolitan cities like Hyderabad, Bengaluru, Kolkata, Mumbai and  New Delhi in the first year.  Locations have been identified in these cities and work has already started in some of these cities.

The bank proposes to offer between 5.75 per cent and 9 per cent for term deposits of varying maturities. For savings deposits, the rates vary from 6 per cent to 7 per cent, based on the outstanding balance in the account. Senior citizens will be entitled to an additional 0.05 per cent for term deposits.

ESAF Micro Finance, which presently has a network of 285 branches in 93 districts spread over 11 states, will currently convert all its existing branches into customer service centres or ultra-small branches or satellite offices, said bank Managing Director and CEO Paul K Thomas, ESAF.

“Micro Finance, which owe its success to the door step delivery of services, will replicate the same model for the bank. We are planning to appoint 10,000 banking associates for providing services at doorstep. The associates will provide service such as account opening, banking transactions and small value loans,” he added.

ESAF, which has own fund of over INR 300 crore, recently raised another INR 330 crore through the issue of commercial papers. The bank is targeting a business of INR 20,000 crore by 2020. The bank is supported by a strong board chaired by R. Prabha, former Chairman, Kerala Grahmin Bank.

Inaugurating the Bank the Chief Minister said that the bank should work for the marginalized section of the society who still does not have access to banking services. He reiterated that it should work for the needy as the meaning of the word ESAF in Arab means giving relief. ESAF has already been involved in educating the banking illiterate about creating awareness about various pension schemes and bank support for agriculture sector.

Unveiling the ATM cum Debit card of the bank, Leader of Opposition party in the state, Ramesh Chennithala pointed out that the nationalized banks have these days moved away from the poor despite the poor and marginalized are in the forefront to repay their loan compared to the big corporates. Debit Cards were distributed to selected five women beneficiaries from the states Chhattisgarh, Maharashtra, Kerala, Tamil Nadu and Madhya Pradesh.

The bank will launch a novel social deposit scheme, Hridaya Deposit, for HNI and NRI customers. It will enable the customers to contribute to the overall development of the underdeveloped segments in the society. The minimum deposit limit for the scheme is INR 15,00,000 and there is no cap on the maximum limit. As a value added service the customers will be provided facilities for making video calls to the kith and kin free of cost at the bank branches.

The bank has introduced paper less account opening, cash home delivery, Biometrics facility for online money transfer and online shopping facility. “We are planning to construct 25 houses for the homeless from among our members and will give scholarships for the students. Best women entrepreneur will be recognized added Paul Thomas.