Bandhan Financial Services gets final RBI nod

BANKING/FINANCE

Bandhan Financial Services gets final RBI nod

by Shrutee K / DNS

Mumbai, June 17, 2015: Bandhan Financial Services Ltd, India’s largest microfinance company, today got the final nod from the Reserve Bank of India (RBI) to set up a universal bank. The bank is planned for launch in Kolkata – the city where Bandhan is headquartered - on August 23, 2015.

Bandhan had received the RBI’s in- principle licence in April 2014. Since then, the company has been working towards transforming itself into a bank, a task for which it appointed five specialized agencies - Deloitte Touche Tohmatsu India Pvt. Ltd. as consultant for the banking project; FIS as the information technology (IT) partner; Aon Hewitt to design the human resources and compensation policy for employees; Madison Media for the advertising campaign; and Ogilvy & Mather to handle the brand-building exercise.

Bandhan recently completed raising INR 1,020 crore equity from International Finance Corporation, Singapore's sovereign wealth fund GIC, and the state-run Small Industries Development Bank of India. Following the equity infusion, its net worth has gone up to INR 2,700 crore, well above the RBI’s stipulation of a minimum capital base of INR 500 crore for new banks.

Bandhan has appointed 850 experienced banking professionals at senior and middle level positions to run its operations, in addition to the 17,000 employees that the microfinance entity already has on its payroll.

“Our plan is to open around 500-600 branches across India with a special focus on the east and north-eastern parts of the country. We will be a bank for all, but our primary objective will be to serve the unbanked,” said Mr. Chandra Shekhar Ghosh, Director of Bandhan Financial Services Ltd. “The bank will specially cater to the need of Micro Small & Medium Enterprise and Small & Medium Enterprise units. We have adequate capital and solid risk management system in place and we will serve everyone with utmost honesty and the highest ethics,” he added.

About Bandhan Financial Services Ltd.: Bandhan made a humble beginning in 2001 with the idea of making a significant contribution towards poverty alleviation by empowering women. It is registered as a non-banking finance company (NBFC) with the Reserve Bank of India.  Its operations are spread across a wide geography of 22 Indian states through a network of 2,022 branches. More than 6.6 million women are serviced by dedicated workforce of 17,000 employees. The loan book stands at nearly INR 10,000 crore.

Besides microfinance, Bandhan is also actively engaged in the development of fields like education, health, livelihood promotion, enterprise development, market linkage, employment generation, and renewable energy, and others. Every year a portion of the surplus generated by the company is utilized in supporting these development activities.