Private sector lender CSB Bankformerly Catholic Syrian Bank, announced today that it has entered into a partnership with a non-banking financial company, IIFL Finance (IIFL) for sourcing and managing retail gold lending assets.
Acting as Business Correspondent (BC) of the bank, IIFL will find new business in markets where CSB Bank does not have an adequate branch network. IIFL, with its extensive branch network, would help CSB Bank to penetrate the lower layers of customers and rural areas, which would lead to an increase in customer base.
“CSB Bank strives to serve the underbanked or unbanked. Gold lending is the main driver of the bank’s business. IIFL Finance, with its extensive branch network, robust technology and over a decade of experience in gold lending, is the ideal long-term partner to help the Bank penetrate the underserved segments of the customers in the undercovered geographies of the country,” said CVR Rajendran, Managing Director and CEO of CSB Bank, upon signing the agreement.
CSB Bank is one of the oldest private sector banks in India, with its strong presence in Kerala, Tamil Nadu, Karnataka and Maharashtra through 432 branches and an overall customer base of 1.5 million in SME segments, Retail and NRI. Recently, the bank announced a threefold increase in its profits for the quarter ended September 30, after an increase in gold lending activities, where assets increased by 47%.
IIFL Finance with over ₹38,300 crore Assets Under Management (AUM) is present across India through an extensive network of 2,372 branches in over 600 cities in 25 states and serves approximately 4 million customers. About 90% of its loans are commercial in nature and more than 40% are in line with priority sector loans. Gold loans represent approximately 25% of IIFL’s loan assets under management.
“This is a win-win partnership, which combines the strengths of the bank’s balance sheet and NBFC’s last mile with customers, to help financial inclusion for disadvantaged customers in need of credit on terms reasonable. CSB Bank’s strong financial position, institutional ownership and focus on governance make us excited about the potential of this partnership,” said Nirmal Jain, Chairman of IIFL Finance.