Capital Small Finance Bank Ltd - Stock Valuation and Financial Performance

The Bank was incorporated as ‘Capital Local Area Bank Limited’ on May 31, 1999 at Phagwara district Kapurthala, Punjab, as a public limited company under the Companies Act, 1956, and was granted a certificate of incorporation by the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh. The name of the Bank was subsequently changed to ‘Capital Small Finance Bank Limited’ pursuant to a shareholders’ resolution dated April 2, 2016, to reflect the change in status of the Bank from a local area bank to a small finance bank pursuant to the Reserve Bank of India approval dated March 4, 2016, and a fresh certificate of incorporation was granted by the Registrar of Companies, Punjab and Chandigarh at Chandigarh (RoC) on April 15, 2016. The Bank commenced its business pursuant to a certificate of commencement of business issued by the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh dated August 12, 1999. 

Capital Small Finance Bank commenced operations as India’s first small finance bank in 2016 pursuant to RBI’s approval dated March 4, 2016. The bank offers a range of banking products on the asset and liability side, in all the states it operates in, i.e., Punjab, Haryana, Delhi, Rajasthan, Himachal Pradesh and Union Territory of Chandigarh. The bank has an experience of over two decades in the banking industry, having been incorporated in 1999. The bank is regulated by RBI and are one out of the two non-NBFC microfinance entities to receive the SFB license in 2015. The bank’s core strategy is to strengthen its retail focused banking franchise by enabling access to affordable credit in the states it operates in its well defined niche catering to middle income group segment with special emphasis on rural and semi-urban areas. 

The bank focuses primarily on the middle-income customer segments i.e., customers with an average annual income of Rs 0.4 million to Rs 5 million in semi-urban and rural areas with 41.62% of its branches in rural areas, 34.68% branches in semi-urban areas and 23.70% of its branches in urban areas as on September 30, 2023. Since it focuses primarily on the middle-income customer segments, its full suite of products and services on the asset and liability side will provide it an opportunity to serve more customers in the middle-income segment that have limited or no access to formal banking channels, spread across rural and semiurban areas. The bank’s background as a local area bank helped it in understanding needs of its target customers but restricted its geographical outreach. Post conversion into a small finance bank, it has been able to expand its operations into new and contiguous geographies which has enabled it to widen its customer base and resulted in improved operational and business metrics. Over the years, the bank has expanded its operations strategically in the north Indian states of Punjab, Haryana, Rajasthan, Delhi, Himachal Pradesh and Union Territory, Chandigarh. 

Business area of the bank

The bank focus on providing all banking product and services to the customers with emphasis on rural and semi-urban areas which allows it to penetrate deeper into the markets it caters. 

Key awards, accreditations and recognitions

• 2007: ICAI Awards for Excellence in Financial Reporting by the Institute of Chartered Accountants of India.
• 2008: ICAI Awards for Excellence in Financial Reporting by the Institute of Chartered Accountants of India.
• 2013: Certificate of Participation for Social Banking Excellence Awards - 2013 from ASSOCHAM India.
• 2017: India's Best Companies to Work For 2017 by Great Place to Work Institute India.
• 2017: Special Award for being the first small finance bank in the country to go live on all NPCI products from NPCI.
• 2018: India's Best Workplaces in BFSI 2018 by Great Place to Work Institute India.
• 2019: India's Best Workplaces in BFSI 2019 by Great Place to Work Institute India.
• 2020: India's Best Workplaces in BFSI 2020 by Great Place to Work Institute India.
• 2021: Certificate of appreciation under GST.
• 2021: 2020-21 Annual Report recognised with Platinum Award in 2020-21 Vision Awards LACP for excellence within the industry on development of the organisation’s annual report.
• 2021: Certificate of Appreciation by Ministry of Finance, Government of India.
• 2022: Certificate of appreciation under GST from the Central Board of Indirect Taxes and Customs.
• 2022: The Economic Times Awards for Corporate Excellence 2022.
• 2022: Promising Brands of 2022 in the 5th edition of The Economic Times Promising Brands 2022.

Major events and milestones

• 1999: Incorporation of the Bank and started operations as a local area bank in Jalandhar, Kapurthala and Hoshiarpur as a local area bank.
• 2011: Total business of the Bank crossed Rs 10,000 million
• 2013: The Bank expanded operations in two additional districts of Ludhiana and Amritsar which expanded the outreach of the Bank to five districts.
• 2016: Launched operations as a small finance bank.
• 2016: Total business of our Bank crossed Rs 25,000 million.
• 2017: Investment of Rs 646.65 million raised through private placement.
• 2018: The total number of branches of our Bank crossed 100.
• 2019: Total business of our Bank crossed Rs 60,000 million.
• 2021: The total number of customers of our Bank reached 0.6 million.
• 2021: Total business of Bank crossed Rs 89,500 million.
• 2022: Share of digital transactions in non-cash transactions increased to 71%.
• 2023: Net profit of our Bank crossed Rs 935.96 million registering a growth of 50% over the previous Financial Year.
• 2023: Total business of Bank crossed Rs 120,000 million.