Managing balance sheet and risk is the most critical thing for any NBFC: S. Sreenivasan, CFO, Bajaj Finserv

S Sreenivasan, Chief Financial Officer, Bajaj Finserv Limited, talks about how government steps towards the NBFCs will support the sector, opportunities in the sector and what is his outlook on NBFCs during an interview with Swati Khandelwal, Zee Business. 

Edited Excerpts:

Q: Do you think that the steps taken by the government is enough and has the potential to change the face of the NBFC sector?

A: Whatsoever has been done is very positive and will help the sector. However, the NBFC sector is very large, we have very small to large NBFCs, and because of the weighs of the last year and a half, we are seeing money gravitated more towards the larger, established and well-managed NBFCs. So, the challenge is for the banks to figure out and how we can support the rest of the ecosystem in a more meaningful way using these measures that the government has given and they have to figure out, how to lend - responsible lending - but increase the penetration in those.

Q: Bajaj Finserv is an example of being strong amid difficult times. Tell us about the thing helped you to stand firmly? Also, update us on the opportunities that are visible in the space?

A: We have always focused on risk, asset-liability management is in our blood, so it is not because of the events but much before that we have a monthly ALM committee, which meets and does it thoroughly. Managing the balance sheet and the risk is the most critical thing that any NBFC has to do and we have done it very well. We have diversified our book quite well across consumer, SME, Auto and commercial and will continue to follow the diversified practice. Lastly, we are able to get those repeat customers quite a lot, which is very important and it comes from customer experience and the speed at which you resolved the loans and the number of offerings that you give. So, we will continue to do the same thing and want to do it better.

Q: Are you looking at the acquisition of small NBFCs and are struggling to consolidate Bajaj Finserv position in the market and strengthen itself in some areas? 

A: You will not get a good NBFC at a low valuation but we see tremendous opportunities in our existing customer segment in the way we want to grow our business. And, consolidation is not required in it at present. So, we will be focused on our existing business and will be investing more in digitisation, digital models, partnership ecosystem and cards business. We will be expanding them a lot.

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Q: What is your outlook on the growth of NBFCs at least when credit growth is a concern?

A: As long as our customers keep borrowing from us and we are able to provide them with the platform. We will like to grow much better than the market but can't provide you with the numbers now but we would like to repeat a good reasonable performance. We have never said that we will grow at 35-40%, which has happened in our eyesight, but we will see as the market grows. But, we have many things like we finance medical expenses, travel expenses, discretionary and non-discretionary spending. So, we hope that on an aggregate basis there will be some pockets that will grow faster while others may not grow as fast because demand is low. Plus, there are some areas where we will be cautious because we want to lend less for the time being. Thus, it is a mixture of all these and is a very-very intense activity of desiring our growth but we can't put a number and go after it. As of now, we are cautious but cautiously optimistic.