Bandhan Financial Services to launch bank operations in August

Come August, a new bank-Bandhan Financial Services Ltd-will make its debut in the country.

Bandhan was among the two successful candidates, the other being IDFC Ltd, which got the license from the RBI to start universal banking operations. Both the new debutants are unique in many ways. Bandhan's origin is purely microfinance in nature, whereas IDFC has been a dedicated infrastructure institution.

The duo represents a niche segment in the banking space where previous banking candidates were more universal in nature. The two licences given by RBI is almost a decade after Yes Bank and Kotak Bank getting their licenses. Both these new-generation banks have scaled up their operations in every area of banking.

Bandhan, which has planned its launch from its home city of Kolkata, has been working towards transforming itself into a bank since April 2014 when it got the license. Bandhan already has a history of successfully running a microfinance business for close to one and a half decades.

Major companies, like Deloitte Touche Tohmatsu India, have partnered as a consultant for the banking project. Fidelity Information Services acted as information technology (IT) partner while Aon Hewitt worked on the human resources and compensation policy.

On the resources side, Bandhan has completed its Rs 1,020 crore equity raising from International Finance Corporation, Singapore's sovereign wealth fund GIC and the state-run Small Industries Development Bank of India.

As a result of this equity infusion, its net worth has gone up to Rs 2,700 crore, which is well above the RBI's stipulation of a minimum capital base of Rs 500 crore for new banks.

The hiring for the bank is in full swing with Bandhan appointing 850 experienced banking professionals at senior- and middle-level positions.

In addition, 17,000 employees are already on its payroll. Chandra Shekhar Ghosh, Director of Bandhan Financial Services, while announcing the bank's entry said, "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."

Ghosh, who is also the founder, said 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.

Currently, Bandhan has operations are spread across a wide geography of 22 Indian states through a network of 2,022 branches. The loan book stands at nearly Rs 10,000 crore.