Citi India Focuses on Instant Loans to Develop Retail Book

Citibank India, the country’s most profitable foreign lender, focuses on instant loan disbursement to cross-sell at a rapid pace and grow its retail portfolio (individual borrowers). After launching instant personal loans a few quarters ago, the lender launched instant mortgages and instant credit cards for existing customers.

Banks are increasingly considering online loan disbursement to expand their retail portfolio.

“My focus on cross-selling allows me to grow gradually, but digitization offers a scale of expansion much faster as we reach the customer at a faster rate. Previously, there would be piecemeal automation of a process, whether at the approval or documentation stage, which would eliminate some manual steps. Now we make the whole process instant, ”said Kartik Kaushik, Country Business Manager for Retail and Commercial Banking.

Like other lenders, Citibank maintains its instant loan offer for existing customers.

However, the online mortgage that launched in the quarter ended in June is only available for pre-approved properties. The lender says the online personal loan disbursement, which was launched in the quarter ended in December, is starting to show good results.

“In just six months of launch, a quarter of personal loan origination is done through our instant personal loan product service,” Kaushik said.

This is part of the overall strategy of progressive digitization of all offers, from end to end. In fact, across Asia, the lender said 95 percent of all of its transactions already occur outside of a branch.

Apart from that, online support is now used more and more as an acquisition tool and in Asia one in five credit card accounts acquired come from digital sources. In India, a third of the bank’s customers would be acquired via digital medium.

However, over the past year, Citibank India’s performance has come under pressure. The lender posted a 5% drop in net income for the year ended March. Profit after tax was Rs 3,233 crore in FY16 compared to Rs 3,423 crore the previous year. The pressure on the portfolio is believed to have arisen from the corporate side and the bank’s retail portfolio has grown steadily. “The growth of the consumer business has been constant. The CAGR (compound annual growth rate) of the retail book is in double digits and continues to remain so, ”Kaushik said.

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