Federal Bank is a traditional financial institution from India. The name alone makes it sound huge and vital. And it is. This particular bank (headquartered in Aluva, Kochi, Kerala) is one of the subcontinent’s leading institutions with 1251 branches and 1665 ATMs scattered all over the country. It also operates in Duba and Abu Dhabi.
Because of its sheer size and market penetration, Federal Bank manages about 15% of all remittances arriving in India, so it’s a critical player in the market.
And it’s looking to modernize and get up to date. Last Thursday, it brought online two new remittance services in the UAE in close association with partner exchanges and banks so that remittances to India through Federal Bank become a better option for customers and partners alike.
The bank is making this move in the hopes that offering better solutions based on new technologies will improve the customer experience thus increasing its share in the market.
Shyam Srinivasan, MD & CEO, Federal Bank, explained,
“Federal Bank is an important part of the remittance eco-system to India, so, it is only natural for us to offer the latest technology to our customers and remittance partners such as exchange houses and banks”
One of the new solutions the bank is working with is blockchain technology, which it recently updated. The new platform it adopted is easy to use.
It’s the plug-and-play of international transactions, and it allows exchanges, remittances, and banks all over the Middle East to connect among themselves and transact in a seamless and fast (almost real-time) way. Lulu Exchange, for instance (based in the UAE), has implemented this cross-border payments platform recently as well.
NRI’s are also in the bank’s mind as it launched the platform. Beneficiaries can get their money using a memory-friendly Virtual Payment Address (VPA).
This platform complies with the UPI 2.0 standards, which are the currently valid upgrade to the Unified Payment Interface by National Payment Corporation of India. And this system enables customers to send money into India employing VPAs.
But the most exciting part is that the bank is partnering up with none other than Ripple. Ripple is a blockchain technology company which has been trying precisely to take advantage of its blockchain network, software platforms, and digital currency to remove as much friction as possible from the hassle of settling international payments.
“For long Federal Bank has endeavored to bring our non-resident clientele closer to their homes. Each of our digital offerings has been designed with this objective in mind,” explained Srinivasan.
Federal Bank is growing in two-digit rates in loans and deposits.
Times are good for Federal Bank. Just last December, it reported that its loans and deposits business had grown y more than 20% each. This is in an industry in which low single digits are celebrated when it comes to growth. The bank’s CEO said that,
“Both credit and deposit growth for the bank over last many quarters has been well into the 20s. Both the low cost and the overall deposit growth has been quite good. We have close to 1 percent overall deposit market share and we are growing close to 2 percent. On the incremental deposit addition in the market, we are getting close to 2 percent of the share.”
This hasn’t been fortuitous. The bank’s credit has been expanding consistently for ten quarters in a row, and it expects to keep growing at high rates in the near future too.
The bank’s health is beyond questioning. Its NPL (non-performing loans ratio) is around 3% only “For many quarters now; we have maintained consistent asset quality. We expect to maintain the cost of credit at around 65 basis points, in line with our earlier guidance,” according to Mr. Srinivasan.
But further expansion for this already large bank can only be possible by focusing on digital financial technology. “The theme is branch light and distribution heavy. We have put in more relationship managers, so we go out more than the clients come to us.”
Image courtesy of Pixabay.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.