A high interest rate on long-tenor term deposits has helped Bajaj Finance to hit the Rs 50,000-crore deposit mark in July.

The share of fixed deposits is at over 20 per cent of consolidated borrowings for the deposit-taking non-bank finance company.

The NBFC at present offers interest rates of 7.4 per cent for 12 months, 7.55 per cent for 24 months and 8.05 percent for 36-60 months with senior citizens getting up to 0.25 per cent extra on these rates.

In the banking space, a 60 month term deposit could garner anywhere in the
range of 6.6-7.4 per cent and the rates are generally higher in the 12-24 month tenors for banks.

“Fixed deposits are strategically important as it is part of the granular liability raising strategy. Our deposits book crossed a milestone of Rs 50,000 crore in July.

“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,” said Sachin Sikka, executive vice-president — fixed deposits and investments, Bajaj Finance Limited.

The FD book of Bajaj Finance has grown at a compounded annual growth rate of 60 per cent in the last 8-9 years and the depositor base has grown at 50 per cent CAGR. Around two-third of the company’s deposits come from retail customers, the rest being corporates.

“Our strategy has always been longer tenor. We are most competitive in the 44 months segment, where we offer an interest rate of 8.6 per cent (for senior citizens).

“Retail depositors also have a natural affinity towards investment diversification and we provide discovery of our investment offering through a digital investment marketplace which comprises 44 mutual funds from respective AMCs,” said Sikka.

As of June 30, 2023 fixed deposits contributed to 21 per cent of consolidated borrowing and the company is looking to take it up to 25 per cent of consolidated borrowing.

“The digital investment marketplace is gaining traction and seeing traffic of
2.5 million a month. Our partner ecosystem, presence across 4,000 locations and sharp focus on a granular deposit strategy is enabling us to work towards a diversified liability book for the long term,” he said.

In Q1FY24, assets under management of Bajaj Finance was at Rs 2,70,097 crore (trillion) compared with Rs 2,04,018 crore, growing by 32 per cent. The NBFC has booked 9.94 million loans during Q1FY24, recording its highest-ever new loans in a quarter.