IDFC First Bank’s transformation to retail complete

The bank created out of the merger of an infrastructure lender and a non-banking finance company began life with multiple disadvantages poor retail funding and rising bad loans from infrastructure lending. But that is changing for the better, said V Vaidyanathan, chief executive of the bank in an interview with Saloni Shukla and MC Govardhana Rangan.

Even in the hardest of cycles, having access to public deposits is a very big factor. The start-up stage of any bank is very hard because they don’t have operating profit. Your expenses are almost equal to your income, you have to build branches and ATMs.

Both institutions were asset heavy and had no liabilities, this was the hardest thing to deal with, especially in a situation of low profitability. I don’t look a gift horse in the mouth. The merger (of Capital First and IDFC Bank) brought with it a banking licence which is super precious.

It’s just that the cycle turned for the worse after the merger. The IL&FS crisis happened in November 2018, then many of these names you are talking about became problems from that crisis. All these issues are in the past, and they are all accounted for.