Equitas pays high cost loans

Equitas Bank

equitasChennai based Equitas Holdings  Ltd, recently granted small finance bank status by Reserve Bank of india,  is in the process of pre-paying existing bank loans worth Rs.3,000 crores.  These loans were taken before Equitas converted into a bank.

Equitas Small Finance  Bank has already begun its operations on 5th Sept, 2016 with three branches in Chennai. Another 409 branches will be commence in the next six to eight months. Equitas was one of the 10 financial institutions which was given license by the RBI to start as a bank. For this,Equitas Micro Finance, Equitas Housing Finance and Equitas Finance were merged together.

Now, the new bank is going to replace high-cost bank loans by funds which are raised at lower cost.

Over the past few weeks, Equitas has raised Rs. 4000 crore by selling commercial papers and bonds so that its bank journey becomes smooth. And now by paying its loans, Equitas is going to boost its net interest margin by  at least 30-40 base points in the short term.

At present, 50% of its existing loan portfolio is micro loans, 25% is used commercial vehicle loans 20% is micro and small entrepreneur loans and remaining 5% is towards housing loans. My March, 2017, the bank plans to launch more loan based products like agri loans and old loans.

The new bank plans to hire around 3000 more people to its current strength of 9000. Equitas has also raised Rs 2,170 crore in initial public offering in April, which helped it reduce foreign shareholding to 35% from 92.6%, below the stipulated 49%.

"Exciting news! Elets Banking & Finance Post is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest insights!" Click here!

Elets The Banking and Finance Post Magazine has carved out a niche for itself in the crowded market with exclusive & unique content. Get in-depth insights on trend-setting innovations & transformation in the BFSI sector. Best offers for Print + Digital issues! Subscribe here➔ www.eletsonline.com/subscription/

Get a chance to meet the Who's who of the Banking & Finance industry. Join Us for Upcoming Events and explore business opportunities. Like us on Facebook, connect with us on LinkedIn and follow us on Twitter, Instagram & Pinterest.