India's third largest private lender feels it is a misnomer to say that venturing deep into the unbanked areas is a pain point, and asserted this business will be profitable in a few years.

"The RBI said you could front-load your 25 percent branches in unbanked areas and carry forward the benefit over the next three years. We have already done so...This year we would have done about 300 unbanked branches," Axis Bank Retail Banking President Rajiv Anand said.

This gives the city-based bank the opportunity to have over 750 branches in the better-performing areas in tier-I, II and III centers.

As part of its financial inclusion drive, RBI in May 2013 allowed banks to front-load their 25 percent mandatory new branches in unbanked areas and carry forward to open the remaining 75 percent new branches in urban areas over the next three years.

Axis has around 2,300 branches, 52 percent of them in the semi-urban, rural and unbanked areas, Anand said.

Asked about the financial implications of more rural branches, Anand said this will not hurt key ratios as the branches are small and operate at lower costs.

"This year we would have done about 300 unbanked branches. They are relatively low-cost."

The bank feels there is a big opportunity in rural areas and it is looking at it beyond garnering deposits.

"The rural opportunity is big, absolutely. That is something key to our business as we go forward...we are not interested in deposits, but want to participate in the larger financial needs, including loans, insurance and start them off on some basics on investments."

"It is not a strip down of our model, it is a new set of customers which we want to cater to. They have very similar banking or financial needs," Anand added.


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