A strong culture, customer trust, a nd customer-centric products are transforming the banking experience for IDFC FIRST Bank’s clients. The outlook for the next 4-5 years is promising, with a clear business model in place and a stable path ahead. Amidst this, IDFC FIRST Bank’s goal is to enhance profitability in the coming years, and we explore the emerging opportunities ahead. In the first quarter, the bank’s pre-provisioning operating profit increased by 25.5 per cent to Rs1,882 crore, up from Rs1,500 crore in the same quarter of the previous fiscal year. During this period, IDFC FIRST Bank reduced its gross Non-Performing Assets (NPAs) to 1.9 per cent of gross advances by June 2024, down from 2.17 per cent the previous year. Net NPAs also fell to 0.59 per cent, down from 0.70 per cent. “The strong growth was made possible by having a ‘customer first’ philosophy in a competitive and commoditised space. We have the distinction of providing a slew of unique offerings in the industry. These offerings are based on the foundations of ethical banking, digital banking, and social good banking. We are focused on building a granular retail deposit franchise and have been able to grow significantly,” says Chinmay Dhoble – Head, Retail Liabilities & Branch Banking, IDFC FIRST Bank. The quarter-on-quarter performance has helped the private-sector lender in effectively mobilising deposits, which grew nearly 42 per cent year-on-year in the fourth quarter ended March 2024 to reach Rs1,93,753 crore, and 78 per cent of these are by retail customers. Its CASA ratio, which is the proportion of current accounts and savings accounts – one of the cheapest sources of funds for a bank – in its total deposits, stands at a healthy 47 per cent. ‘Zero fee’ policy Contrary to industry practice, the bank has done away with charges on services, including IMPS, RTGS, NEFT, cash deposits, debit cards, non-home branch access, cash withdrawals at ATMs and branches, third-party transactions, SMS alerts, cheque books, demand drafts, pay orders, and duplicate statements. The ‘zero fee’ policy is applicable to all types of savings accounts, urban or rural, irrespective of their average monthly balance requirement. Additionally, IDFC FIRST has removed complicated service charge-related descriptions, calculations, and language that customers don’t understand. Another industry-first feature is the monthly crediting of interest on savings accounts, rather than the traditional quarterly schedule. This provides account holders with a consistent monthly income. The bank’s ‘Customer First’ approach is evident in its diverse range of offerings, including savings products tailored for kids, students, women, and senior citizens, as well as salary accounts for defence personnel and public-sector employees. Notably, senior citizens – an important customer segment – benefit from no penalties on premature fixed deposit closures and receive free cyber insurance coverage up to Rs2 lakh to protect against online fraud. Additionally, they are provided with complimentary health benefits.
-
Contrary to industry practice, the bank has done away with charges on services
