Provides some clarity on eligibility:
Millenia - 21-35 year olds, with income less than ₹12 lakh
Classic - above 35 and earning over ₹12 lakh
Select - above 35 but are in the middle to senior management and earn between ₹15 lakh and ₹35 lakh
Wealth - affluent
Until April the cards will only be offered to existing customers.
@naga_praveen That branch design isn’t really unique. Something like that doesn’t offer any competitive advantage, it can be easily copied by any bank/nbfc.
This picture you have put is of ATM’s and not branches.
Could be, I found it in a random article. But my point was even if it is something new being tried by the bank, there is nothing that stops competitors from copying it easily.
Personally, I’m looking forward to more digital disruptions going forward than on how they design their branches. In just 2 years the bank has successfully ramped up Pay Later and redesigned credit cards as a product, high CASA growth, digital account opening etc. All while cleaning up the loan book. Excited to see what new solutions they come up with when they are no more hindrances after infra/wholesale mess is dealt with completely.
My takes from the mint article:
It will be interesting to see if IDFC First bank stops opening branches at 800 as in many of his interviews at time of merger Vaidyanathan sir was saying he needs to take number of branches to 600-800.
Also IDFC Bharat branches are not included in 728 count. Though they are doing very good work in sourcing loans to the bank.
Hello everyone,
I have a question regarding bank’s future tax payments. As the company has incurred 4700 crores loss in the last two years, how much of it can company adjust in its future profits and until when?
Has there been any change in this loss adjustment clause since 2019 when the govt lowered companies’ tax rate to 25%?
Thanks in advance
This got me curious so I looked at their annual report to learn what exactly is it that they do.
IDFC First Bharat seems to be registered as a Business Correspondent. There are 7 others like it Business Correspondance | IDFC FIRST Bank
Some interesting points from the Bharat annual report
In addition,to the distribution of existing products viz., Joint Group Liability Loan, Micro Housing Loan, Micro Enterprises Loan, during the year, the Company has started distributing Two Wheeler Loan,Housing Loan & Loan against Property.The Company is in the process of introducing new products such as Gold Loan and other allied products in the next financial year.
I did not count the branches of other BC companies but on a quick glance the total reach through BCs is likely more than 700 (including 354 of IDFC First Bharat).
Since this is my first post here, I want to take this time to thank everyone for their insightful inputs. I have been a long time passive follower and the quantity and quality of analysis in these forums never ceases to amaze me.
So, I had applied to a card as well and the Mint article was pretty interesting given the age + income crtieria which was laid out by the bank. Today evening, I received a call confirming my eligibility for the same. The call mentioned that I was eligible for “IDFC First Bank Credit Card” and after a series of questions I figured out that it was the Millenia Card with a credit limit of 30,000 (I started laughing on hearing this from the operator but was silently impressed at the strictness of the underwriting, I guess) and 36% APR. Just for background, my primary bank is HDFC bank and I do have only one card - the Diners Club Black which I have been paying off regularly.
One of my doubts from the Mint article was on the methodology of the underwriting and how the bank would take both the variables - age + income while building the model. Given that I am 28 (and fortunately, an income much higher than 12 LPA), I guess the bank has taken the age factor into account? I did ask the operator about this and why the credit limit was so low but I guess that was just naiveness on my part to expect a concrete answer from them. He did say something about me being able to increase my credit limit sometime in April contingent on monthly usage.
It appears like several people on this thread might be interested in sharing their IDFCF credit card offers. I am creating an easy to share format which is also somewhat privacy preserving:
| VP username | Age bracket | IDFC F CC | IDFCF CC IR | IDFCF CC CL | IDFCF savings account? | IDFCF loan holder | Other CC highest CL | Cibil Credit score |
|---|---|---|---|---|---|---|---|---|
| sahil_vi | 20-30 | Millenia | 33% | 62,000 | Yes | No | 2,50,000 | 789 |
| amanj86 | ? | Wealth | 12.96% | x2 | Yes | ? | 1.25*x2 | 750+ |
| Soumyadeep_Majumdar | 20-30 | Millenia | 36% | x3 | Yes | No | 8*x3 | 750+ |
If anyone wants to add a row to this table or update their row, please reach out to me on VP DM. I will update this table periodically. The collective data gathering might enable us to learn something about the credit culture.
PS: data sharing and privacy are always two ends of a debate. I have gone with a very conservative table schema for now: only broad brackets for age, no info about personal income, no info about savings account balance. Hope that enables more people to come forward to share their data to enable better collective data gathering.
@amanj86 what do you mean by credit score? Which credit agency are you looking at (AFAIK there are few like Cibil, CRIF, Experian). I find experian and CRIF easy to figure out via CRED app, but Cibil is not that easy to figure out.
Sorry I don’t plan to apply for the card for personal reasons so can’t contribute to data. But won’t this method of data collection lead to sampling bias? Especially soon after limited launch. They’re likely still in experimental phase and will end up revising eligibility criteria. I don’t think any meaningful conclusions can be drawn at this time. Let’s hope they include data specific to credit cards in presentations and annual reports.
Not specific to the bank but signs of improvement. Article says auto debits are more prevalent in non bank lending apps to riskier borrowers, so the bank’s collections should be in a much better place.
According to Dec 2020 SHP institutional investors have increased their stakes by ~3Cr shares
The RBI bulletin is relevant to IDFC First in a way, as their target base is similar to small finance banks.
I know, yet another article on credit cards but this has some good commentary from executives at other lending orgs.
After reading it I think I understand why the bank took so long to launch the credit cards. Collecting data on spending behavior was likely the most important aspect of the prolonged beta test with employee credit card. Lets see how this plays out in the real world.
PS: paid article but has a 30 day free trial
While institutions will slowly enter , it will be a while before we see a rush of funds as it still does not fulfill certain criteria / filter of continuous profits for 4 quarters , dividend etc .
While I have no doubt in my mind of VVs ability to scale assets side now ( with liabilities firmly fixed ) , two questions still remain
Any opinion anyone ?
As far as I know, PE is not very important when valuating banks. IMO large equity base is a concern because of free float in traders’ hands which is not good for small investors, but this would reduce as institutional investors increase their stake overtime.
I would rather they don’t pay until profits start swelling up, or at least keep the yield low. Not paying dividend means that would add to book value (correct me if I’m wrong). Same argument applies for buybacks to reduce equity base. Reverse split is one option but this issue is probably the last thing on VV’s mind, won’t happen until there’s pressure from majority of investors.
Big B is promoting credit card. Seems they started taking applications for outsiders(not having any other relationship with bank) also. https://youtu.be/s9FXh6i6Nuw
Wanted to share some some annecdote about a call with the bank. After I rejected their credit card, got a call from branch manager today. I explained to him why I was disappointed with the credit card offered to me. Explained to him what the flaws are in the system right now and why it doesn’t work for me.
Good to see bank calling up customers proactively to solicit feedback on their actions. 
if they can now act on this feedback by modifying the credit card launch (even after few months) this would be absolutely wonderful imo.
What I told him:
Very encouraging but not surprising, it would be weird to set hard and fast rules in this digital age. The “customer first” approach is not as simple as satisfying customers but doing it efficiently. I saw job postings for analytics wherein it was clearly mentioned that the role would involve analyzing customer outreach campaigns data.
All this experimentation is in line with the DNA of the bank that embraces new tech and encourages innovation. Age and other limitations are likely simple but certain ways to contain risk in the initial stages while they figure out what works and what doesn’t.
There is also an understated benefit of working with multiple external partners in the early stages (startups and lending partners). Anyone familiar with software engineering would know how complex things can get when dealing with external software systems, the fact that they have already integrated with so many means whatever platform they have in the backend has gone through various changes in 2 years and should be fairly stable going forward, making it easier to scale.
On an unrelated note, I was curious about how No Cost EMI works for a lender and came across this video. It’s in Hindi but the gist of it is - cost is marked up by enough amount so that both bank and retail channel can take a cut before it goes to manufacturer.
I looked into this because I think VV said in some video that he like consumer durable loans a lot, the list of eligible items in the bank’s catalogue is pretty long. Does anyone have any idea about the average yield on these loans? Will probably from a large part of the book going forward.
Disc: largest holding, not a recommendation
The interest rates on TD (for bulk deposits) have been revised downwards yet again:
