Dhanlaxmi Bk loans increase 10%, highest in 10 quarters
However, to maintain the growth momentum, the bank will need to require approval from its shareholders to raise capital. Currently, the bank, which is run by a six-member board, including two from the Reserve Bank of India, is engaged in a legal battle with wealthy shareholders seeking representation on the board. The bank does not have any identifiable promoters. The RBI has taken a position that shareholders cannot directly vote directors on a bank’s board of directors.
Speaking to TOI, Managing Director and CEO of Dhanlaxmi Bank, JK Shivan, said the lender has been successful in breaking into the small business market. These borrowers have a triple A rating but have a low financing requirement of around Rs 100 crore. This – along with home loans, auto loans, and home equity loans – has allowed the bank to expand its portfolio. Thanks to loans to this segment, the bank managed to increase its share of business loans from 25% to 29% in December 2021. It increased its global lending by 10.5% year-on-year at the end of December. – the highest in 10 quarters.
The private lender was struggling with credit growth due to its relatively smaller size and cautious approach. “We got board approval for the co-loan with finance companies, but we’re not there yet. The next step is the business correspondent model for the microfinance segment, which we approach with caution, ”said Shivan.
Shivan expressed hope that shareholders would approve the capital increase. “Our activity has resumed with a credit-to-deposit ratio exceeding 60% after a very long period. The only program is growth. There is no other program, ”said Shivan. Dhanlaxmi Bank is also planning to grow its credit card portfolio and EMI card portfolio through a fintech partnership. It looks at secured credit cards, where even those without a proper credit history can be assigned a credit limit that matches the fixed deposits they maintain with the bank. As of December 2021, its loan portfolio stood at Rs 7,122 crore while deposits stood at Rs 11,712 crore (up 5.5% year on year).
The bank also hired a digital consultant to advise them on integrating fintech companies. “It will start with credit cards and then with an EMI card. We don’t plan to do everything, but we are currently paying 45,000 cards and only have 15,000 active cards, ”said Shivan. Other products include secure cards issued to customers against fixed deposits that they maintain with the bank.