Bajaj Finance Deposits Soar to Rs 50,000 Crore: A Landmark Achievement in 2023
The company provides interest rates of 7.40% for 12 months and 7.55% for 24 months. Interest rates range from 36 to 60 months at 8.05%. Senior people receive an additional discount of up to 0.25% on these prices.
With its consolidated deposit book exceeding the Rs 50,000-crore threshold in July and its depositor base reaching 500,000, Bajaj Finance has become the nation’s largest non-banking financial company (NBFC) that accepts deposits.
“For the corporation, 44 months with an interest rate of 8.60% for older folks and 8.35% for everyone else was the sweet spot. According to Sachin Sikka, executive vice president of fixed deposits & investments at Bajaj Finance, our goal has always been to provide selected deposit customers with long-term savings options. He stated that as of June’s end, the liquidity reserve was Rs 12,704 crore.
Bajaj Finance is currently the biggest deposit-taking NBFC in the nation following the merger of HDFC Bank and HDFC. LIC Housing Finance, Mahindra Finance, and Shriram Finance are other large NBFCs that accept deposits.
When the company’s balance sheet reached Rs 17,000 crore in 2014, deposits were first accepted. Both the asset and liability bases should be diversified. The deposit book has increased at a CAGR of 60% during the past ten years and the number of depositors at a CAGR of 49%.
Non-convertible debentures (NCDs), deposits, short-term commercial paper and bank loans are the tools Bajaj Finance utilizes to raise money. Bank loans comprise 31% of borrowings, followed by deposits at 21%, short-term borrowings at 12%, and NCDs at 36%.
The company provides interest rates of 7.40% for 12 months and 7.55% for 24 months. Interest rates range from 36 to 60 months at 8.05%. Senior people receive an additional discount of up to 0.25% on these prices.
“In the past two to three years, deposits have doubled. This was partially due to the alluring interest rates, but a significant portion was due to consumers’ confidence in the Bajaj brand. According to Sikka, only some unclaimed deposits have been made due to the company’s strategy of depositing money back into customers’ accounts upon maturity and our seamless origination and servicing processes through digital journeys on the app.
Retail clients make up two-thirds of the deposits, with corporations making up the remaining one-third. Senior folks makeup around 40% of depositors and typically put between 67% and 70% of their total assets in deposits. Many of the company’s consumers, representing all age groups, have chosen FDs through digital means.
The cost of funds in Q1 increased sequentially by 22 basis points to 7.61%. By June 30, the deposits book had increased 46% year over year to Rs 49,944 crore. In Q1, net deposits increased by Rs 5,278 crore.
The company’s long-term debt programme has the highest credit rating of AAA/Stable from CRISIL, ICRA, CARE, and India Ratings; its short-term debt programme has an A1+ rating from CRISIL, ICRA, and India Ratings; and its fixed deposit programme has a AAA (Stable) rating from CRISIL and ICRA.
S&P Global Ratings has given Bajaj Finance a long-term issuer rating of BBB-/Stable and a short-term issuer rating of A-3 for the external commercial borrowings programme.
Bajaj Finance Limited, one of India’s leading non-banking financial companies (NBFCs), has hit a new milestone as the cumulative deposits in its portfolio crossed Rs 50,000 crore in 2023, demonstrating remarkable financial resilience and strategic acumen amidst challenging global economic conditions.
This achievement has established Bajaj Finance as a significant player in the Indian financial ecosystem, strengthening its reputation for sound financial practices and customer-centric offerings. This accomplishment is indeed a testament to the trust that customers have vested in the organization and the company’s long-standing commitment towards safeguarding and growing their investments.
Several factors can be attributed to Bajaj Finance’s tremendous growth. Primarily, their vast array of fixed deposit schemes catering to different investor needs, competitive interest rates, and innovative digital offerings have significantly driven the company’s deposit portfolio growth.
Bajaj Finance offers a diverse deposit product suite that caters to various customer segments, including individuals, senior citizens, and corporates. Their products are structured to provide competitive interest rates, ensuring investors receive optimal investment returns. These comprehensive, differentiated offerings have been instrumental in expanding their customer base and increasing their deposit portfolio.
In an economic environment where traditional banks offer relatively lower interest rates on deposits, Bajaj Finance has maintained its competitive edge by providing attractive interest rates on their fixed deposits. This strategy has been crucial in attracting a vast customer base seeking higher investment returns.
Bajaj Finance’s robust digital platform, facilitating a seamless and hassle-free customer experience, has significantly contributed to its success. With a simple, user-friendly interface and secure online infrastructure, customers can easily open and manage their fixed deposits, making the process more accessible and convenient. This digital-first approach has allowed Bajaj Finance to stay ahead of the curve and consistently add new customers.
Bajaj Finance’s significant milestone in deposits is an accomplishment for the company and a positive signal for the entire NBFC sector. It underlines the trust customers place in NBFCs and their significant role in India’s financial ecosystem.
Bajaj Finance is poised to grow further and continue playing a substantial role in India’s burgeoning NBFC landscape. With its robust business model, customer-centric strategies, and an enduring commitment to digital innovation, Bajaj Finance is well-positioned to achieve new milestones.
Bajaj Finance’s achievement of crossing Rs 50,000 crore in deposits is a remarkable feat that exemplifies its strong financial position, strategic foresight, and commitment to customer satisfaction. It’s a significant milestone reinforcing their leadership in India’s financial services sector.
