Fincare Small Finance Bank (previously known as Disha Microfin Limited) on Friday kick-started its banking operations with about 25 operational branches across Gujarat, Tamil Nadu, Karnataka and Andhra Pradesh.

The bank was given final small finance bank (SFB) licence from the Reserve Bank of India (RBI) in May this year. On the day of its launch, the bank raised over Rs 225 crore of deposits from its about 1000-odd depositors. This forms about 15 per cent of the bank's existing balance sheet of Rs 2000 crore, which includes Rs 1,350 crore as loans and advances, Rs 450 crore as investments besides the deposits.

Fincare CEO Rajeev Yadav informed that the bank started its operations with 25 branches, out of which nearly 50 per cent are located in Gujarat. "We also have over 250 MFI offices of Disha MFI, which will be converted into banking outlets to facilitate our customers in remote locations. By the end of this fiscal, we plan to have 50 branches including over 300 banking outlets, 60 full-service branches and about 130 partner branches," said Yadav here.

The bank has about 900,000 borrowers, who have outstanding of an average ticket size of Rs 15,000. "Still the repayments have been slow for past three months due to cash flow impact after the demonetisation. But as the cash flow situation starts improving we will see repayments returning to normal," Yadav said.

Currently, Fincare has Gross NPA of about 7-8 per cent, while the Net NPA is around 5-6 per cent.

In a bid to become a small finance bank, Disha Microfin had acquired the business of Future Financial Services in October 2016. Currently, as per the RBI norms, promoters and management hold 20 per cent in Fincare, while the remaining 80 per cent is with PE funds.

The bank aims to be digitally driven, rural and semi-urban bank, focusing on the priority sectors and retail segments of micro and small enterprises.

Fincare has laid ambitious plan to have 10 million customers with a deposit base of Rs 14,000 crore and assets of Rs 20,000 crore by 2022.

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