Indian lender DCB Bank has revealed plans to double its branches to 300 from 150 by December 2016 in anticipation of competition from micro finance institutions who have been awarded small bank licences by RBI recently.
This is a major change in strategy, given the fact that the bank has opened not more than 25-30 branches a year.
As a part of this strategy, the bank also plans to increase headcount by 50-60% to 5400-5800 from 3700 currently.
The bank will also invest heavily in customer facing, frontline enabling technologies.
The bank’s management indicated that planned expansion could negatively impact its profits till fiscal year 2018.
The cost-to-income ratio may also rise by 5% to 11% from current levels of 61% and the return on equity may continue to be below 10% as operating expenses increase.
Also, the lender revealed that it is exploring partnerships with start-ups that have disruptive banking concepts.