Axis Bank to increase penetration in rural India

Axis Bank is looking to increase its penetration in the rural and semi-urban markets by adding 75-80 new branches in the current financial year, through its Bharat banking division. Axis Bank currently has 43% of its total 4,758 branches in these geographies. In comparison, ICICI Bank and HDFC Bank have 52% and 50% of its total branches in those geographies, respectively.

IndusInd Bank has 44% while Kotak Mahindra Bank has mere 34% branches in rural and semi urban locations.

ICICI Bank had started increasing its branches in the rural and semi-urban locations even before the pandemic, as the lender added 134 branches in such areas in FY20, totalling 1,126. The pace of increase in the bank’s branches was somewhat slower during the pandemic, but it increased to 1,251 as of September 30. Of the total 6,499 branches, HDFC Bank has 50% of its branches in remote areas and it plans to add another 1,064 branches in FY23. The bank, in May, started a rural banking division to improve its operations in rural areas.

Axis Bank is planning to increase its market share in terms of credit and deposits in the rural and semi-urban areas, led by a low-cost distribution model, relying on improving the digital capabilities. The move comes on the back of the strong growth witnessed by the bank from the rural and semi-urban areas. The lender saw a 44% year-on-year growth in the gross book of rural centric products in H1FY23, led by microfinance, retail, farm & equipment finance and business and gold loans.