Private player, Yes Bank has revealed its plans to foray into retail lending by the next fiscal.

The bank has plans to enter the retail lending space with a special student loan offering in April 2010. The bank is working to create bandwidths with various educational institutions on a countrywide magnitude to kick off its new business.

Rana Kapoor, founder and managing director of the bank, said, "That is going to create a robust environment for education loans in India."

Education has been one of the focus areas of this year budget and presents good business opportunity, as Kapoor feels- "Higher government allocations and increased spending by the Indian hoi-polloi on education are expected to fuel growth of private education institutions in India."

Commenting on the product selection (education loans), Kapoor said, "Somewhere between 150 and 250 branches there is a window for us to look at education loans. We have a university and school relations function in our bank. These relationships make only natural for us to cascade an educational loan product."

The bank plans to scale up its branch count to 250 by the end of next fiscal from the existing number and also has plans for increasing its ATM count to 3000 by 2015 in pipeline.

"We wanted to make sure we have the reach before we make an entry into the retail lending market. At 100 plus branches, we have critical momentum but we get size and scale only at 250," Kapoor added.

Presently, small and medium enterprises form more than ninety percent of the bank` lending portfolio, as revealed by Kapoor - "More than 90% of the bank's advances are currently towards large and mid-size corporate clients. Retail advances, comprising small business loans, stood at only 1.1% of total loan book as on March 31, 2009."

Considering the uncertain economic climate and risk involved, many foreign banks have been scaling down their retail lendings. BNP Paribas and Bank of America are major foreign banks in India, which are not in to retail lending space.

One of the major young private players in India, Yes Bank is the only Greenfield licensed bank in period of last 14 years.