CSB lines up big plans to diversify from gold

Mumbai: Prem Watsa's Fairfax-backed CSB Bank is collaborating with the likes of HDFC, IIFL, Pine Labs and OneCard to offer home loans, broking, wealth management, merchant acquiring and credit card services to its customers.

The bank, currently largely reliant on gold loans to grow its credit book, is inking these tie-ups in a bid to become a full-service bank and make its portfolio more granular.

"In our journey towards a full-service retail bank, we are building the franchise through partnerships whether in assets, liabilities, entry-level wealth businesses and also upgrading our technology to stay ahead in the future," said Pralay Mondal, president - retail, SME, operations and IT at CSB Bank.

The lender has tied up with HDFC to offer competitively priced home loans. Under the arrangement, it would generate leads for the mortgage lender in return for a fee. It is also exploring portfolio buyback options at a later date. Mondal feels this initiative will help the bank build a strong CASA (current account savings account) franchise.

"We were losing customers to the competition - as we will take a few years to build our portfolio, it was important that we give customers special offerings, protect our franchise and get our systems ready for such products," he said.

CSB has also tied up with FPL Technologies to offer their premium credit card - OneCard - to its customers. The bank expects to get approvals in another quarter after which the product will be rolled out to its customers. It is also creating customer segmentation as part of its loyalty programme to eventually offer wealth management services.

"I am not only looking at protecting my current base, but I also have to expand my customer base and through the credit card route I will be able to add a lot more customers to the bank," Mondal said.

The lender has also inked a partnership with Pine Labs for payments, point of sales and merchant acquiring business. It will set up at least 1,000 kiosks in an exclusive partnership with FSS in deep rural geographies. These kiosks will offer financial services through the business correspondent (BC) network and cross-sell loans, insurance and mutual funds. CSB has also tied up with IIFL for broking services.

"The next leg of growth is going to come from co-lending arrangements with multiple players and a strong business correspondent network that can take all kinds of financial offerings to the nook and corner of this country," said Mondal.