City Union Bank (CUB), based in Tamil Nadu, is preparing to introduce a range of digital products to aid MSMEs, housing retail streams, and car loans. The bank plans to launch these products with the assistance of the Boston Consulting Group (BCG) within the next few weeks. According to N Kamakodi, the Managing Director and CEO of City Union Bank, once the products go live, minimal documents will be required from applicants, as most of the necessary data will be accessed and processed digitally.
The bank recognizes the impact of digital instruments such as UPI and QR codes on the use of plastic money, particularly point-of-sale (POS) technology. As a result, City Union Bank aims to align itself with market trends introducing these digital instruments.
City Union Bank has appointed the Boston Consulting Group (BCG) to upgrade its digital lending processes, focusing on MSMEs, retail housing streams, and car loans. The bank anticipates the rollout of the first product within the next few weeks, with all products expected to be available within three months. The digitalization of these processes will significantly reduce the turnaround time for MSME-secured credit delivery.
The introduction of UPI ATMs is another noteworthy development. City Union Bank was one of the first banks to implement this feature, with over 800 ATMs currently equipped with UPI capabilities. The implementation of UPI and QR codes has already had a significant impact on card usage, leading to a decline in POS transactions. UPI ATMs will further reduce the reliance on cards for banking transactions.
Looking ahead, City Union Bank is planning partnerships that focus on digital lending with fintechs, using APIs to revolutionize the banking landscape. By embracing digital lending, CUB aims to create multiple fintech and digital partnerships to better serve MSMEs, commercial trading, agriculture, and gold loans.
As the festive season approaches, City Union Bank is preparing for increased demand for credit. Traditionally, the festive season has seen a rise in credit demand, and City Union Bank is fully prepared to meet this demand.
In terms of targets for the financial year, City Union Bank aims to explore opportunities in the co-lending space, including housing and vehicle loans. The bank hopes to achieve a growth rate of 12-14% during FY24, not only being competitive but also venturing into retail lending, services lending, and NBFC lending.
Looking at the Indian banking sector as a whole, City Union Bank believes it is resilient and well-equipped to overcome challenges. The banking system has demonstrated its ability to navigate through various crises, including the global financial crisis, the COVID-19 pandemic, and geopolitical crises. With adequate capitalization and robust risk management systems, the Indian banking sector continues to adapt and improve.