Capital Small Finance Bank targets ₹16,000 crore loan book by FY29 without equity infusion

Jalandhar, Punjab: Capital Small Finance Bank aims to scale its loan book to ₹16,000 crore by FY29, up from the current ₹7,955 crore, entirely through internal accruals without requiring any additional equity infusion. According to top bank officials, ploughing back profits and utilizing other financial levers will suffice to meet this growth target.

Addressing the bank's capital structure, Executive Director Munish Jain noted that the Capital to Risk-Weighted Assets Ratio (CRAR) stands at 20.8 percent, with Tier-1 capital at 18.5 percent. Depending on future expansion needs, the institution's primary option for capital management will be tapping into Tier-2 capital rather than raising equity before FY29.

As of September-end 2026, the Jalandhar-headquartered bank reported a 23.4 percent year-on-year growth in loans, reaching ₹9,755 crore. The loan portfolio comprises MSME, trading, and business loans at 28 percent; agriculture loans at 26 percent; loans against property and mortgages at 14 percent; corporate loans at 14 percent; housing loans at 10 percent; and consumption and other retail loans at 7 percent.

Deposits grew by 16 percent year-on-year to total ₹10,831 crore at the end of September 2026. Current Account and Savings Account (CASA) deposits improved to 34.5 percent of total deposits, compared to 33.9 percent in the previous year.

The bank's leadership highlighted that 97 percent of its loan portfolio consists of secured exposures, with the average ticket size rising to ₹19.53 lakh from ₹17.10 lakh a year ago.

Regarding interest rate movements, Jain stated that the 25-basis-point repo rate hike has been moderate and has not notably impacted overall credit demand. However, the bank is monitoring the interest rate environment closely. While one additional rate hike is expected to have minimal impact, a second consecutive hike could potentially affect specific segments, such as housing demand.

Looking ahead, Capital Small Finance Bank has formalized its Vision 2029 to achieve the necessary scale and operational diversification. The bank intends to approach regulatory bodies to request a transition into a universal bank by FY29 once these operational milestones are met.

"Capital Small Finance Bank's strategy to fund its growth through internal accruals and Tier-2 capital reflects a disciplined approach to capital management. By focusing on a secured, granular portfolio and building scale organically toward Vision 2029, the institution is laying a steady foundation for its eventual transition into a universal bank." — Dr. Shishir Gupta, Founder & CEO, StartupLanes