‘Bajaj Finance offering investors long-term savings solutions always’

Bajaj Finance has seen rapid growth in its fixed deposits segment. What according to you are the main factors that are driving people to place deposits in Bajaj Finance?

From zero to Rs 50,000 crore, our deposits have grown at 60 per cent CAGR in the last 8-9 years. We have about half a million depositors today who have given us almost 1.4 million deposits till date, which works out to 2.87 deposits per customer. Our deposits book has crossed a milestone of Rs 50,000 crore. The growth is a function of attractive interest rates and the trust that customers have placed in the Bajaj Finance brand. Our digitisation efforts and policies have also helped. For instance, depositing the money back into the customer's account on maturity without holding it for a single day. As a result, today we have negligible unclaimed deposits. Our seamless process of origination and service through our digital journeys on app and web have significantly contributed to our deposit book, which has grown 2x in the last two to three years. Bajaj Finance has 73 million customers and 40.2 million customers on its app.

How do FDs fit into your funding strategy?

Firstly, the fixed deposits offering is one of the two franchises in the Bajaj Finance’s ecosystem which has customers beyond the lending business, the other being payments. It also helps discovery of its investment offering which comprises 44 mutual funds. Deposits contributed to 21 per cent of consolidated borrowings as of June 30, 2023. We hold high liquidity buffer which as of June-end was Rs 12,704 crore.

Deposits have grown at 60 per cent CAGR in the last 8-9 years and the depositor count went up to 50 per cent CAGR, with deposit origination from 500 locations. With its sharp focus on its granular deposit strategy, Bajaj Finance is well placed to achieve its medium to long-term strategy of liability diversification.

How are you placed vis-à-vis banks when it comes to interest rates offered on Bajaj Finance FDs?

Our interest rates are comparable for shorter tenors and competitive for longer tenors. This is because our strategy has always been to offer investors long-term savings solutions. The sweet spot for us is 44 months, where we offer an interest rate of 8.60 per cent to senior citizens. We offer interest rates of 7.40 per cent for 12 months, and 7.55 per cent for 24 months. For 36 to 60 months, interest rates are 8.05 per cent. Senior citizens get up to 0.25 per cent extra on these rates. The pricing strategy for deposits depends on macro indicators as well as industry pricing like large banks.

With customers preferring digital channels, how is Bajaj Finance fixed deposits team using its strategy?

Bajaj Finance has 40.2 million customers on its app and every month almost 2.5 million traffic comes on our investment marketplace which has deposit origination and MF distribution. Clearly, there is a large interest on our digital properties. Additionally, our entire ecosystem of customers, partners and employees use various digital tools, resultantly 40-50 per cent of our deposits are generated online.