We Are in No Hurry to Become a Universal Bank

Focusing on individual loans even as it plans to move into small-ticket secured loans of ₹10-20 lakh, diversify the asset mix, strengthen deposit franchise, and leverage digital platforms. "We prefer steady, sustainable growth," Baskar Babu Ramachandran, Suryoday SFB's managing director and chief executive officer, told Raghu Mohan. Edited excerpts from a telephonic interview:

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If you are, or were to become, an aspirant for a universal banking license — aside from the change in nomenclature — what would this shift mean?

We'll take at least a couple of years before applying. Even if we are allowed to do everything a universal bank does, our portfolio is not likely to consist of, say, 50 per cent or more of loans above ₹25 lakh. I'm quite certain the regulator will keep revising those limits over time, so I'm not overly fixated on that figure. For instance, they've already made a gradual shift in priority sector loan requirements: to 60 per cent from 75 per cent. I believe, in a couple of years, that it may further come down to 50 per cent. Another mandate is that 50 per cent of our portfolio must be of loans less than ₹25 lakh. I'm quite sure that this threshold will also move up to ₹50 lakh eventually. If those adjustments are made, from an operational perspective, there isn't much of a difference between an SFB and a universal bank. The real difference lies in the nomenclature.

Assuming you do become a universal bank, what can you bring by way of differentiation?