Private sector lender Axis Bank is focussing on rural markets as part of a strategy to deepen its retail business.

Pralay Mondal, who joined the private sector lender in April this year as Executive Director, Retail Banking, remains upbeat about the retail franchise, but said that the consumption story has slowed down as people are deferring purchases.

“This is an opportunity for me to take ahead a good franchise. The country is going to grow, though right now it may be a bit of a challenge. But consumption is our story and within that, private banks are taking market share over a period of time, especially in the retail segment,” he told BusinessLine, adding that the lender will focus on about six key areas in its retail business.

Axis Bank, which is the country’s third-largest private sector lender, is now deepening its geographical reach and has already started a pilot in six districts for rural customers.

The idea is to use its branches to offer all products to the customer by leveraging its businesses of rural lending (micro finance, KCC, tractors) and retail assets (two-wheeler and auto loans, LAP, personal loans, and credit cards).

Customer engagement

Mandal said Axis Bank hopes to roll out this model in about 40 locations over the next six months and take it across the country in a year’s time. “We want to look at rural markets as a strategy. We have to learn from FMCG companies,” said Mondal.

Simultaneously, the lender is also looking to deepen its customer engagement and have “quality customer acquisition”. While it has not set a target, it is keen on getting a larger wallet share of the customer. It currently has about 2.5 crore customers. As on June 30, 2019, the bank’s retail book grew 22 per cent annually and retail loans comprised 52 per cent of the overall loan book.

Mondal, who is on the board of Axis Bank as well as Axis Securities and Axis Finance, also wants to use the expertise of all the subsidiaries of the lender, including those such as Freecharge, and also create more of a One Axis brand and cross-sell to customers. “Each of the subsidiaries can grow with support of the bank, and the bank can also use their expertise,” he said, pointing out that often customers don’t even know all the products available with the bank.

When asked about the recent slowdown in consumption, he said the bank’s portfolio has not been hit, but noted that on the whole people are deferring purchases. “There is a little bit of slowdown in the ecosystem, but I don’t think there is a lack of confidence. People are optimistic, but they are asking what is the big hurry to buy,” he said, adding that it is sentiment-driven.

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