Chennai, 10,May 2021; V Vaidyanathan, Managing Director and CEO, IDFC FIRST Bank, said, “Including the equity capital of Rs. 3000 crore raised through QIP on April 6, 2021, our overall capital adequacy is strong at 16.32%. We maintain high levels of liquidity with liquidity coverage ratio of 153%. We therefore approach FY 22 with strength and confidence.
Strong inflows from retail customers based on our strong brand, our excellent service levels, and strong product proposition has resulted in surplus liquidity at the Bank. Our CASA grew 122% last year and we reached a record CASA ratio of 51.75%. We have therefore reduced our savings rates to as low as 4% and peak savings rates to 5%, effective May 1.
This reduction of savings rates to market benchmarks is a seminal moment in our journey as a Bank, as we will now be able to participate in the Prime Home loans market, which is largely to employees of top Corporates. The Bank has started offering prime Home loans at as low as 6.9%. This will set the Bank up for perennial growth with even better asset quality going forward.
Our home loan book grew strongly at 37% during FY21. Home loans is a large Rs. 25 lac crore market in India and home loans will continue to be our key business line going forward as well.
When COVID 1.0 struck in March 2020, we made necessary changes by restricting lending to COVID affected industries and by tightening credit norms accordingly. Thus the loans booked after June 2020 already factor in the COVID impact, and are in fact behaving better than pre-COVID bookings, adjusted for like-to-like vintage.
On the collections front, we’re happy to report that our collection efficiency for early buckets in March ‘21 reached 100% of pre-Covid (Jan- Feb 2020) levels. We will closely watch the impact of COVID second wave and deal with the situation accordingly. Our bounce back of collections to 100% when economic activity revived in H2 2021 demonstrates that our underlying portfolio quality is high and when the economy revives, customers do start repaying well again.
With accelerated digital initiatives, new product launches including credit cards, and significant investment in creating superior customer experience, the Bank is now on a strong footing to participate in the emerging opportunities of FY22.”