Best of New Breed Banks

Laser-sharp focus on asset quality helps Utkarsh maintain lead over others

- B. S. SRINIVASALU REDDY

GOVIND SINGH, MD & CEO of Utkarsh Small Finance Bank Ltd

At time when any reference to Indian banking conjures up images of spiralling non-performing assets (NPAs) that most large players have been grappling with for years, the new-breed Utkarsh Small Finance Bank (Utkarsh SFB) has been able to maintain top-notch asset quality. This is one reason it has emerged as the Best Bank in the Small Finance Bank (SFB) category, introduced for the first time.

Despite being sixth in capital adequacy, fourth in growth and fifth in size in its category, Utkarsh SFB was at the top of the heap in Quality of Assets, measured by 10 subparameters, in the quantitative study for FY20. In Quality of Earnings, it got the second rank, while in productivity and efficiency, it was third among SFBs.

The seeds for high asset quality were sown right at the inception of Utkarsh as a microfinance (MFI) lender in 2009, the bank’s earlier avatar. “The focus was fixed on two things, excellent quality of assets and no compromise on risk and process controls, which are meticulously followed even today,” says Govind Singh, Managing Director & CEO of Utkarsh Small Finance Bank Ltd, who has been in banking for over three decades.

Asset Quality

Eleven years back, Utkarsh, then an MFI, decided not to give any incentive for ticket size or collections. The aim was to take care of the process of sourcing a customer. “The moment you give an incentive for ticket size, people will increase the amount of loan sought. It is important how you source the customer, not what you do after the sourcing. We ensure that the process is always supreme,” says Singh.