Equitas Small Finance Bank is set to upgrade its full-year advances growth guidance to over 25% following a strong first half performance, with MD and CEO PN Vasudevan indicating that a formal upward revision will follow the upcoming quarterly results. The bank initially projected a 20% expansion in advances for financial year 2026-27 (FY27), but the April-June quarter growth reached 28%, and momentum has continued into the July-September quarter. As reported by CNBC TV18, the second half of the year traditionally proves more robust for credit uptake, supporting the bank's confidence in exceeding its initial projections.
Asset quality metrics are tracking ahead of initial estimates, with the bank recording 1.36% credit cost in the first quarter - typically the weakest period for collections. Full-year credit costs are now expected to fall below the 1.5% mark initially guided. According to CNBC TV18, the bank expects to comfortably exceed its target of 1.2% return on assets for the full year and achieve a 1.5% exit rate in the fourth quarter. This improvement is expected to offset projected net interest margin compression of 15 basis points due to higher deposit rates.
Addressing the recent declaration of drought across 74% of Maharashtra, affecting 265 of the state's 358 talukas, management sees limited risk to the loan book. As reported by CNBC TV18, Equitas does not issue direct agricultural loans, relying instead on its microfinance portfolio to meet priority sector lending requirements. Repayment patterns remain stable, and collection efficiency in the microfinance segment is holding steady between 99.7% and 99.75%. Even if the state government expands farm loan waivers, microfinance loans are not directly covered under such schemes.
Equitas Small Finance Bank Ltd announced that its proposed Goods and Services Tax (GST) assessment has been substantially reduced to ₹23.95 crore from the original ₹533.81 crore following a personal hearing held on September 25, 2026. According to reports from CNBC TV18, the revised amount comprises ₹21.67 crore tax, ₹0.11 crore interest, and ₹2.17 crore penalty. The bank stated it believes the remaining amount is also eligible for exemption and will submit further evidence to establish its position.
Separately, ESAF Small Finance Bank announced that its board had approved raising up to ₹500 crore through private placement of non-convertible debentures (NCDs) to augment Tier II Capital. As reported by CNBC TV18, the proposed NCD issue will comprise Listed, Rated, Taxable, Unsecured, Transferable, Redeemable and Fully Paid Up Basel II-compliant Lower Tier II subordinated bonds. The board meeting was held on Wednesday, September 23, 2026, with the approval valid until the conclusion of the next Annual General Meeting of the bank.
