NSE Symbol: RBLBANK | BSE Code: 540065
RBL Bank that was earlier known as Ratnakar Bank is one of India's rapidly growing private-sector banks with an expanding presence across the entire country. The Bank offers functional services under six business verticals namely;
Corporate & Institutional Banking,
Branch & Business Banking, Retail Assets,
Development Banking and Financial Inclusion,
Treasury and Financial Markets Operations
It currently maintains over 4.9 million customers through a chain of 266 branches and 199 banking outlets and 369 ATMs that are spread across 20 Indian states and Union Territories. Founded in 1943, RBL Bank started its transformational journey under new management in 2010.
On 9 August 2013, Ratnakar Bank declared that it has agreed to procure Royal Bank of Scotland Business Banking, Credit Cards business & Mortgage portfolio in India which are subject to approval from the Competition Commission of India (CCI). This deal complemented the existing business of Ratnakar Banks and it also imparted much strength in the desired product and customer sections. The transaction was expected to help the bank in augmenting the capabilities in a short span of time and improve CASA. (CASA is the ratio of savings and current deposits of a bank to the total deposits in the bank)
On 10 April 2014, Ratnakar Bank declared the achievement of 328 crores worth capital infusion as a part of its third round of funding in the past three years which was led by global investors like CDC Group Plc and Asia Capital and Advisors Pte Ltd. Already existing investors like the International Finance Corporation and Gaja Capital also participated in this round. The new funds assisted the bank in extending its branch network in rural and semi-urban areas of the country as well as rendering a suite of financial products and services to the sections of society that are not familiar with the banking system. In November 2014, the name of the bank was changed from Ratnakar Bank to RBL Bank, which was the result of the issue of a fresh certificate of incorporation by the RoC.
In December 2015, the fresh capital was increased for augmenting the Banks tier-1 capital to meet the future capital requirements that are expected to appear out of growth in the Bank's assets and comply with the Basel III norms.
In August 2016, RBL Banks earliest initial public issue was oversubscribed seventy times. The stock started at the price of Rs 273.70 on BSE August 31, 2016, which was a 21.64% bonus over the IPO price of Rs 225 per share. In September 2016, RBL stated that it had raised 330 crores from the development-finance institution, CDC Group Plc (CDC), through compliance with the Basel III Tier II capital which was based in the UK. The Tier II capital strengthened the capital base of the bank, which supported businesses such as SME lending, agri-business financing and financial inclusion. Such infusion also helped the bank to expand into new regions within the country. In October 2016, RBL Bank stated the acquisition of a 9.99% stake in Utkarsh Micro Finance Ltd (UMFL), which was considered to be a strategic move to reach out to the sections of the society who have limited knowledge on the banking system of the country. The bank also entered into a MoU to extend its product portfolio to the customers of UMFL. UMFL then received approval from the RBI for setting up a small financial bank and it was expected to commence operations soon after that. In October 2016, RBL Bank, Overseas Private Investment Corporation (OPIC) and NeoGrowth Credit Pvt. Ltd the development finance institutions which are handled by the US government, collectively committed to render financing to SMEs in the Indian retail space. RBL Bank lent to the company NeoGrowth for enabling it to grant loans to SMEs which are excluded from the mainstream funding. This funding will be supported by a 5 million USD loan guarantee from the OPIC. NeoGrowth, which is a non-banking finance institution, employs innovative technology to fulfill the funding requirements of SME, who do not get loans readily from commercial banks due to their small size, inadequate credit history, lack of capital and lack of collateral. In November 2016, RBL Bank and Bajaj Finance Ltd, which is considered to be one of the most diversified NBFCs in India, collectively announced a partnership to launch a range of co-branded credit cards for Indian customers. This partnership helped RBL Bank expand its scale of operations in the rapidly growing credit cards business. The co-branded Credit Cards are available for both existing and new customers of Bajaj Finance Ltd. In the same month, RBL Bank declared that it became the first bank in India to launch Aadhaar Payment Bridge System (APBS) loan disbursements for micro-financing. This was accomplished by making the first successful cashless disbursement to multiple beneficiaries in the rural segment throughout the country.
In April 2017, RBL Bank advertised the opening of its first-ever IFSC Banking Unit (IBU) in the Gujarat International Finance Tec-City (GIFT City). After this, RBL Bank commenced its offshore banking operations from India. The IBU gave RBL Bank the access to venture into international financial markets and the bank will be offering a range of products and services to the clients. RBL Bank raised foreign currency funds to meet its requirements in the IBU and fund its offshore subsidiaries of the Indian companies, other foreign firms, and eligible Indian companies. In August 2017, RBL Bank declared that it had achieved the capital infusion of 1680 crores from a set of marquee investors. The bank issued 3.26 crores worth equity shares on preferential basis at a price of 515 rupees per share. In November 2017, RBL Bank stated that it had increased its stake from 30% to 60.48% in Swadhaar Finserve Pvt. Ltd., which is a captive business correspondent of the RBL Bank, which is engaged in extending services to the financial inclusion section covering MSME & Micro banking in semi-urban and rural areas. RBL Bank purchased an additional 30.48% stake in Swadhaar Finserve, to extend their business strategy of extending their services to under-banked regions of the society.
In June 2018, RBL Bank declared that it has complete stakes in Swadhaar Finserve Pvt. Ltd. (SFPL), which is an exclusive business correspondent of RBL Bank involved in providing services to the underbanked segment in semi-urban and rural areas. RBL Bank has bought the additional stake from marquee investors including the global financial inclusion non-profit, Accion, which has been instrumental in growing Swadhaar into one of India's most active lenders for low-income families and businesses with low capital. SFPL works as a last-mile distributor of comprehensive financial services and products, especially loans and savings products, to low-income households and micro-enterprises across India.
Buying in a high-growth stock like RBL Bank (RBL) in times when the system loan growth is closing to historic lows may resemble a contradiction, but the investment risk has moderated by
RBL’s small market share of less than 0.5%
the enormous opportunity bestowed by the space being vacated by several PSU banks
The significant opportunity for RBL to improve its RoA to comparable levels as its peers.
A majority of private lender stocks were contracting losses in afternoon trade in October 2018 right before the RBI's policy meet outcome. Shares of RBL Bank had gone down by 2%
RBL Bank Ltd surged for a third straight session on 10th October 2018. However, overall, the RBL Bank Ltd stock has dropped around 12.72% in last one month. Meanwhile, the Nifty Bank index which RBL Bank Ltd is a constituent has dropped about 6.14% in last one month. The volume in the stock stood at 13.07 lakh shares in the first week of October.
Since the shares of RBL Bank have taken the hit since last few months and the company is an excellent bet for people planning on investing for the long term due to the growth prospects of the company.