Recently, AU SFB completed seven years as a bank. It merged with Fincare last year, significantly strengthening its pan-India play. The bank’s MD and CEO Sanjay Agarwal in an interview with TOI said they always wanted to decode India. With 2,400 touch points, more than 1 crore customers, deposits of over Rs 1 lakh crore, 46,000 employees across India, and a solid balance sheet, the lender is poised for an amazing journey, said Agarwal. Excerpts…
AU Small Finance Bank has completed 7 years. What have been the learnings?
Before I became a banker, I was a lender, running an NBFC. There is a huge difference. Lending is a transaction; banking is a relationship. For the last seven years, I have been learning about banking. Earlier, I wondered why they magnified 1% into 100 basis points and then learnt quickly how every bps was important. It is a unique platform; the potential size and scale is humongous. The journey has allowed me to learn and unlock my potential as an entrepreneur. It has been very exciting, deep, and enriching as an individual. Also, I have learnt the virtues of being a good planner, executor, and communicator. One has to lead by example, think through while making decisions, understand how important it is to have a 20-year idea and start executing in that direction.
AU bank now has deposits of over Rs 1 lakh crore. Are you surprised with the growth?
There have been many bank failures since Independence. The successful banks have been those which have managed scale, customer satisfaction, satisfied regulators, and stakeholders. As an NBFC, we were very successful and very proud of it. Naturally, after foray into banking, we wanted to be in the top bracket of successful banks. But in banking, the challenges are both internal and external. They created a challenge in me. Yes, I was positively surprised with the growth. Honestly, I was surprised more negatively that how come I was unaware of certain things. In fact, that helped me come back strongly to reach where we are today.With the benefit of hindsight, do you think you could have done a few things differently?
Everything has gone well for us. Still, I think we have grown a little too fast. Given a choice, we would have been well off with a bit less growth. So far, we have not been challenged. But everything looks good when you are doing well. We cannot ignore the possible situation of the external environment becoming tough and getting tested on the edges. That’s why we are building more processes and systems for better real data communication. I came to know very late that banking is a franchise which needs at least 20 years to stabilize, and scale is a must. We used to say good days will come if the Covid pandemic ends. But there is no end to challenges. One has to be on guard all the time.How will the merger with Fincare drive AU SFB’s future journey?
With the merger, AU SFB has become a pan-India franchisee in its true sense. Their balance sheet is 10% of ours, but the value is multifold. Also, we now have diversity with 60% of Fincare’s 16,000 people based out of south India where our penetration was low. We always wanted to decode India. With 2,400 touch points, more than 1 crore customers, deposits of over Rs 1 lakh crore, 46,000 people across India and a wide product range and solid balance sheet, we are poised for an amazing journey. When India is on the cusp of exponential growth, building a pan-India bank is an amazing coincidence. I am very happy with this position.
AU will complete 10 years in the next three years. What are the targets?
We will be doubling our balance sheet in the next three years with an annual growth of 25%. We really want to monetize our distribution in the next 5-7 years. Each of our 2,400 centres should be serving their customers holistically, which the bank can offer. I have understood that 10 years are foundational years for a bank. In the next 10 years, we will have thoughtful growth. I would not say we have made any larger mistakes but the journey after 2027 has to be driven with a different mindset. We have size, brand presence, and resources, and are complete in all aspects. India is on path to become a $5 trillion economy. As the country starts its journey from $5 trillion to $20 trillion to reach the Chinese level of growth, we are well-positioned to ride the wave. Banks are meant to be for centuries. Now, I am reconciled with the fact that the bank is beyond me. In other businesses, it is hard to detach. But a bank allows you to do that even if you are the largest shareholder. We want to have a place among the top three banks in the country. That is pushing me hard, to create something out of Rajasthan, which has never been done, and to inspire others.
Your family foundation acquired a majority stake in Teamwork Arts, and it is driving an initiative to build the Hare Krishna Cultural Centre. Your comments.
My wife Jyoti wanted to do something through which she can make a meaningful contribution to society. I always found a wow factor in the Jaipur Literature Festival, run by Teamwork Arts. The show has its birthplace in Jaipur. When the offer came, I was very excited. Building Hare Krishna Cultural Centre in Jaipur is a lifetime opportunity. I want to give time, and money, and inspire others so that we can give the city one of the amazing cultural hubs.
