Equitas Small Finance Bank is sharpening its liability franchise with a renewed focus on affluent and high-net-worth customers. The bank has expanded its House of Elite proposition, segmenting customers into three tiers, ARTHA for mass affluent, Elite Lite for affluent, and Elite for HNIs.
This sharper segmentation reflects a strategic shift towards family banking and deeper product engagement. The bank currently services around 28,000–29,000 families under this model and is targeting a doubling of this base over the next year, alongside onboarding 3,000–4,000 ARTHA customers. Early traction in the ARTHA segment, management noted, has been encouraging, according to Equitas Small Finance Bank Senior President and Country Head Murali Vaidyanathan.
Branch realignment and RM-led strategy
To support this premiumisation drive, Equitas is recalibrating its branch network. Around 100 branches have been earmarked to exclusively focus on the House of Elite proposition, with dedicated staffing and relationship management (RM) capabilities, he told analysts at a latest earnings call.
The strategy hinges on strengthening RM channels, enhancing product offerings, and embedding value-added services within savings accounts. Competitive pricing at the entry level is expected to complement these efforts, as the bank looks to improve customer stickiness and wallet share in a highly competitive liability environment.
Current account strategy gets a reset
On the current account front, the bank is transitioning to a more segmented and product-led approach. It is building a transaction-led ecosystem powered by soundbox, POS, and QR-based payment solutions, enabling branches to source payment-centric current accounts.
In parallel, Equitas is introducing an asset-backed current account variant, driven by unsecured lending norms, signalling a pivot towards an asset-led acquisition strategy. A third category will target debt-free, non-payment-centric companies through high-variant offerings. While current account growth remained steady in the last quarter, the bank believes this differentiated strategy is essential to sustain momentum.
Universal bank aspirations under review
Providing a strategic update, MD & CEO P N Vasudevan indicated that Equitas will evaluate its eligibility for transitioning into a universal bank, in line with RBI guidelines. With the financial year now closed, the bank plans to undertake a detailed internal assessment before initiating discussions with the regulator.
A final decision will hinge on compliance with regulatory requirements and internal consensus, marking a potentially significant inflection point in the bank’s long-term evolution.
Capital conservation takes centre stage
On capital management, the bank continues to prioritise conservation over aggressive fundraising. The strategy includes leveraging government-backed guarantee schemes such as CGTMSE for vehicle finance and CGFMU for microfinance, which help reduce capital consumption.
Additionally, a growing share of lower risk-weighted assets, particularly affordable housing and gold loans, is aiding capital efficiency. The bank is also selectively using IBPC (Inter-Bank Participation Certificates) to optimise its balance sheet based on market dynamics.