The first microfinance institution in the country launches operations as Bandhan Bank with 1.43 crore accounts in 501 branches across 24 states
Kolkata : Bandhan Financial Services Pvt Ltd, the first microfinance institution in the country to get a provisional bank licence, launched operations as Bandhan Bank with 1.43 crore accounts, around Rs 10,500 crore loan book in 501 branches across 24 states, Chief Executive Officer and Managing Director Chandra Shekhar Ghosh said. To begin with, it has got 2022 service centres, 19,500 employees and 50 ATMs.
“All the existing microfinance customers will migrate to the bank. We have a loan book 10,400 crore, which will come under the bank from day one,” he said.
The savings bank account interest rate has been fixed at 4.25% for balance up to Rs 1 lakh and 5% for balance above Rs 1 lakh. For term deposits, the maximum interest rate has been fixed at 8.5% for 1-3 years, with an additional 0.5% for senior citizens.
The latest private sector lender has fixed its Base Rate at 12% and hopes to lower it down over time as the low-cost deposit mobilisation increases, he said.
It plans to have 632 branches and 250 ATMs in 27 states by the end of fiscal year 2016, the bank said after Finance Minister Arun Jaitley inaugurated its operations here at the Science City Auditorium in Kolkata.
“Till now, as a microfinance institution, we did not have access to low-cost deposits and bank funding was the main source of money. Now, that we can mobilise public deposits, the interest rate will gradually come down, but not immediately,” he added.
Jaitley said a ‘blue-painted’ city has given birth to a new institution which was not the case when it was ‘painted red’ — referring to the past Left rule.
The size of banking assets in India reached USD 1.8 trillion in the fiscal 2013-14 and is expected to touch USD 28.5 trillion by 2024-25.
However, the Indian banking sector is highly fragmented with 46 commercial banks jostling for business with dozens of foreign banks as well as rural and co-operative lenders. State banks control a significant chunk of the market share.
The RBI licensing norms stipulates that a new bank must have at least Rs 500 crore capital. Against this, Bandhan has started with Rs 2,570 crore capital which will soon be ramped up close to Rs 3,052 crore.
