Private sector lender Axis Bank will scale up its branch expansion as it looks to tap into growing opportunities in MSMEs (micro, small and medium enterprises), a segment that has been rapidly growing.
“In FY25 and FY26, we opened 400 branches. This year we have decided to open 500. There is a fair amount of data available that tells us which areas of India are growing faster. You are able to get this data at competition level as well, including their branch presence. This data tells us where we should put up a branch, and then what business should we expect from those markets,” Sanjeev Moghe, head – branch banking, south, Axis Bank said on Tuesday.
While lot of banking transactions now happen digitally, branches have evolved into advisory-led relationship hubs, he noted. The lender had 6,275 branches domestically at the end of March 31, 2026. As cities expand and industrial clusters grow, the bank will expand deeper into these markets.
According to Prashanth TS, group head – mid-corporate and medium enterprises group, Axis, the MSME segment is clocking a 24 per cent compounded annual growth and therefore offers immense growth opportunities.
So, the customer may first only have a lending relationship, but it may expand to family members opening savings accounts to founders seeking wealth management over time, he pointed.
“Most MSMEs are self-funded, where they tend to give their families savings accounts to us. So whatever banking happens, it happens to the ecosystem and the funds tend to remain with us,” Prashanth pointed.
Notably, the MSME business now contributes the highest in terms of monetary value, to the bank’s wealth management offering Burgundy Private, according to him.
MSMEs contribute to over 30 per cent of India’s GDP. In recent years, as digitalisation has grown, underwriting practices have also improved and that has helped banks like Axis significantly expand into this segment.
From around Rs 94,041 crore in March 2021, Axis Bank’s loan book comprising small business banking, SME and mid-corporates, has grown to Rs 293,147 crore at the end of March 2026. Its contribution in the overall loan book has increased to 24 per cent from 15 per cent in that period.
Axis Bank has so far not seen any stress on this portfolio due to the ongoing conflict in West Asia, said Vijay Shetty, group head – commercial banking group at Axis Bank. The bank did take higher provisions last quarter in the wake of the conflict, but officials said it was more of a contingent measure and may or may not be utilised depending on the potential impact of the conflict.
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