The newly-launched ESAF Small Finance Bank will offer interest rates between 5.75 and 9 per cent for term deposits of varying maturities. For savings deposits, the rates will vary from 6 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.
Kerala Chief Minister Pinarayi Vijayan launched the bank, the State’s first private sector bank since Independence, at a function in Thrissur on Friday. The bank’s ATM-cum-debit cards, official Web site and digital banking channels were also launched simultaneously. Promoted by ESAF Microfinance and Investments, the bank proposes to open 85 branches in the first year.
Approval from the Reserve Bank of India has been obtained with respect to 15 of these on the inaugural day itself. These will be full-fledged retail branches and will start functioning from next week at major centres, such as Edapally, Palakkad, Pala, Thiruvalla, Kattapana, Perinthalmanna and Kozhikode.
In accordance with the RBI guidelines, the bank is required to open 25 per cent of its branches in unbanked rural centres. In Kerala, it will open not less than 10 branches in such places. Branches will also be opened in metropolitan cities, such as Bengaluru, Kolkata, Mumbai, Delhi and Hyderabad during the first year of operations. “ESAF Microfinance has a network of 285 branches in 93 districts spread over 11 States.
They will be converted into customer service centres or ultra-small branches or satellite offices,” said K Paul Thomas, Managing Director and CEO, ESAF Small Finance Bank. ESAF Microfinance owes its success to doorstep delivery of services, which will be replicated in the case of the bank too.“We will appoint 10,000 agents for providing services such as account opening, banking transactions and small-value loans at the doorsteps,” said Paul Thomas.
With owned fund of over ₹300 crore, ESAF has recently raised another ₹330 crore through the issue of commercial paper. The bank is targeting a business of ₹20,000 crore by 2020. R Prabha, former Chairman, Kerala Grameen Bank, is the Chairman of ESAF Small Finance Bank. It will launch a new social deposit scheme, ‘Hridaya Deposits,’ for HNI and NRI customers.