IDFC First Bank Limited

Recently I interacted with the branch manager of idfc first bank who is my friend’s friend. I enquired about the business and environment and work culture in the bank. Here are the takeaways.
The first and foremost was NPA , he told me he has 860 sme accounts and each and every account is standard and not a single account is over due and has never been over due.
The average interest rates on offer is upto 3 lakhs it’s 20 to 24 % and above 3 lakhs it’s 18 percent. No wonder their nim is 6%. Their customers small kirana store owners , bike repair mechanics and other small scale business who normally dont get bank credit. The turn around time is 2 days. If they are able to keep this book clean then there is no stopping for them. They followup agressivly even if the account becomes over due for even a day. So what Mr vaidyanathan saying regarding their asset quality is correct as per what is told to me.
Another thing is cross selling. They don’t do agressive cross sell. Recently it has been a norm in sbi ,hdfc and axis Bank to sell insurance policies which is nothing but organised loot. They deduct 30% commission on the first premium. If you asked the employees of those three banks they will say how stressed are they to sell these loot products. It was icici bank under Chanda kochhar who pushed the bankassurance but after Mr bhakshi takeover as CEO they completely stopped agressive misselling. Why I’m emphasing on this is misselling erodes the customer trust in that bank. Soon sbi and hdfc will also realise this. No wonder the ICICI bank is a star performer for the last 4 years.
Idfc first bank will gain the trust of the masses if they continue on this clean bank plank. Because misselling will ruin the life savings of senior citizens middleclass people. And the pressure of crosselling will make the lives of employees miserable as hell. They will resort to cheating the customers which is not at all good for the bank. Happy employees will contribute more to the growth of the bank.
All in all what I can conclude is for idfc first bank the key competitor is Bajaj finance and other nbfc players. They are playing where nbfc’s making their bread. It has the DNA of NBFC and advantage of a bank.
Diclosure : invested