YES Bank wants to customize branches, ramp up digitize customer acquisition to grow at a breakneck speed of 25%

• YES Bank’s is aiming for 25% growth this year, beating the economic slowdown.
• YES Bank’s Senior Group President Rajan Pental says that since the bank is mostly present in the affordable housing segment, the sluggishness of home loans does not affect it.
• YES Bank also plans to double its assets and liabilities from its rural branches.

India is the midst of an economic slowdown with the housing and automobile sector showing the most immediate effects. Yet, YES Bank is bucking the trend and planning to grow its retail banking segment by 25% this year.

"We have been growing the business with a very conservative growth and sticking to the segments which are risk averse. That has been our strategy… This year, we should be growing by approximately 25%," Rajan Pental, Senior Group President and Group Head of Branch and Retail Banking at YES Bank told Business Insider India.

And, the bank has no plans to reduce its interest rates either.

"The rate has a lot of correlations and linkages. For us, we would like to stick to the current rate. We charge better than the other players in the industry. We don’t want to venture into the risk-tier segment," said Pental.

Custom-made branches

The bank plans to ramp up its digital acquisition of customers to increase its own productivity.

It is also planning on customizing its branches according to the customers it services.

For instance, a branch that caters primarily to senior citizens would have a different management system than a branch that caters to small and medium enterprises.

In addition, YES Bank is planning to bag new customers. But, it won’t accept just anyone. It is looking to onboard ‘quality’ customers with good credit records to keep with its risk-averse strategy.

"For example, in personal loans, we don’t fund people who have a salary of ₹15,000 or less. We have fine pricing but at very fine credit quality. And, that is what we would like to stick to," explains Pental.

"Out strategy is not to acquire all — it is only to acquire the best customers," he added

Doubling asset book

YES Bank rural branches are modeled around public sector banks rather than the conventional private sector model. The branch managers have more power since they’re closer to the ground and have better knowledge of the area to conduct credit evaluation.

"Despite the slowdown, we can see ourselves doubling our liability book in the rural sector this year. We will also double our asset book," said Pental.

According to him, the requirements of rural customers are at par with the requirements of the urban customer.


Last year, the books for rural branches stood at ₹2,500 crore and YES Bank plans to hit ₹ 5,000 crore by the end of the year.

"These branches, though a small percentage, are growing at a much faster pace than their counterparts in the urban market," explained Pental.

Bucking the slump in home loans

"The stress is mostly in the medium and large housing segment where we are not present," said Pental.

YES Bank primary target market for home loans is affordable housing where it claims to be growing at a rate of 20-25%. One of the key strategy they have followed is sticking to verified incomes and not baking on too many surrogates, which it claims has largely kept its portfolio intact.

The other reason that Pental cites is that YES Bank doesn’t venture into to deep geographics. It’s presence is restricted to urban and semi-urban markets where the affordable segment is growing at a reasonable pace.

"Even though the impression is that this is the low income segment but, in our experience, we see millennials, youngsters, first time job who are seeking a studio or 1BHK," said Pental.

"We also see low income groups, which is an even split between salaried and self employed customers," he added. Going forward, the biggest challenge YES Bank foresees is the non-delivery of homes.

"Apart from a normal default, which quite less in home loans, the concern which is building is the non delivery of the projects," stated Pental.

YES Bank has also seen an Increase in the demand of commercial leasing space.

"Our observation is, the way properties were falling last year has stagnated to a large extent. There’s no further fall, the values are stable today," said Pental.

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