Suryoday Small Finance Bank Ltd will intensify its focus on strengthening asset quality, expanding secured lending, scaling digital banking initiatives and improving operational efficiency as it pursues sustainable long-term growth, according to Chairman Krishna Prasad Nair.
In his message to shareholders in the bank’s Annual Report 2025-26, Nair said the bank’s growth strategy will remain anchored in stronger portfolio quality, disciplined risk management and technology-led transformation rather than growth for its own sake.
Growth backed by quality
Outlining the bank’s roadmap, Nair said Suryoday will continue to strengthen asset quality, improve collection efficiency and enhance early-warning systems to manage credit risks more effectively.
The bank also plans to scale its secured and asset-backed lending businesses, deepen its granular retail deposit franchise and expand digital partnerships to improve customer acquisition and engagement.
“Our objective is not growth in isolation, but growth supported by stronger portfolio quality, greater operational efficiency and sustainable profitability,” he said.
AI and analytics to drive productivity
The chairman said investments in analytics, artificial intelligence-led underwriting and digital servicing capabilities will remain a priority to improve productivity, enhance decision-making and deliver a superior customer experience.
The bank also intends to expand its digital deposit franchise and strengthen its Credit Line on UPI offering while maintaining a disciplined approach to capital allocation and risk management.
Digital banking gains momentum
Suryoday Small Finance Bank recorded robust growth in its digital banking business during FY26.
The bank’s digital deposit portfolio surged threefold to ₹1,672 crore, with digital channels contributing nearly half of the incremental deposits during the year. The digital deposit business achieved a run rate of around ₹6 crore per day, reflecting increasing customer adoption of online banking services.
The bank’s Credit Line on UPI platform also witnessed significant traction, covering around 11 lakh pre-qualified customers. Of these, 5.3 lakh customers received sanctioned credit lines, while 2.4 lakh customers actively utilised the facility.
Total sanctioned limits reached ₹362 crore, with utilised limits of ₹102 crore.
According to Nair, investments in technology infrastructure, paperless customer journeys, analytics and fintech partnerships are improving customer access, enhancing operational efficiency and creating scalable growth opportunities.
Asset quality improves
The bank reported a marked improvement in its inclusive finance portfolio during the second half of FY26.
Inclusive finance slippages declined to approximately ₹193.1 crore in the second half of the financial year from ₹417.1 crore in the first half.
As of March 31, 2026, the bank’s Gross Non-Performing Assets (GNPA) stood at ₹864 crore, while Net Non-Performing Assets (NNPA) were ₹542 crore.
Nair said the bank continues to leverage the Government of India’s credit guarantee schemes as an important risk mitigation tool. Approximately 98% of eligible inclusive finance portfolios were covered under these schemes, with ₹508 crore receivable as of March 31, 2026.
The bank’s Capital Adequacy Ratio (CAR) stood at 20.5%, providing sufficient capital to support future growth and strategic initiatives.
Deposit franchise strengthens
The chairman highlighted an improvement in the quality of the bank’s deposit base during FY26. Retail deposits, including CASA, accounted for 86% of total deposits, up from 81.1% in the previous year.
The CASA ratio improved to 22.6% from 20.9%, while the cost of funds moderated to 7.7%, reflecting stronger deposit mobilisation and improved funding efficiency.
Nair said the bank remains focused on building a resilient balance sheet while leveraging technology and digital innovation to drive sustainable and profitable growth