Union Finance Minister Arun Jaitley has inaugurated the commercial banking operations of the Bandhan Financial Services (BFS) today in Kolkata.
The Kolkata-based BFS got Reserve Bank of India (RBI) approval to start commercial banking operations last year.
The launching of commercial banking services has allowed 500 BFS branchesto start functioning across the country.
BFS Chairman cum Managing Director Chandrasekhar Ghosh was quoted, as saying that BFS follows a philosophy of respecting each customer and meeting their needs, regardless of their financial position.
As per RBI guidelines, Bandhan will now merge its micro-finance business withthe bank.
Bandhan is the first microfinance company to transform into a bank. Reserve Bank of India has turned liberal in doling out banking licenses to entities of different capabilities. It has just issued 11 in-principle licenses to set uppayments banks.
Bandhan Bank will primarily cater to the unorganized sector like daily wage earners and women running small businesses -- the segments that had been its borrowers for a decade. As a bank, it will also offer savings, remittance and insurance services and try to raise its stake in the bottom of the pyramid customers even as the established ones such as State Bank of India BSE-1.13 % and ICICI Bank are in a race to have more customers from the unbanked population.
Bandhan Bank will primarily cater to the unorganized sector like daily wage earners and women running small businesses -- the segments that had been its borrowers for a decade. As a bank, it will also offer savings, remittance and insurance services and try to raise its stake in the bottom of the pyramid customers even as the established ones such as State Bank of India BSE-1.13 % and ICICI Bank are in a race to have more customers from the unbanked population.
"Our primary focus will be the eastern region where banking penetration is still poor," Chandra Shekhar Ghosh, managing director and chief executive officer said. Ghosh founded Bandhan in 2001.
The company has 67 lakh micro finance borrowers and their accounts have been formally transferred to the new entity, creating around Rs 10000-crore strong loan portfolio to start with.
The company has 67 lakh micro finance borrowers and their accounts have been formally transferred to the new entity, creating around Rs 10000-crore strong loan portfolio to start with.
Bandhan begun operation with 500 branches, a majority of these are in the eastern region including West Bengal.
Former chief economic advisor to the finance ministry Ashok Kumar Lahiri will head a 10-member board which consists of as many as four former top bank executives such as Bhaskar Sen of United Bank of IndiaBSE -0.65 % and B Sambamurthy of Corporation Bank.
Former chief economic advisor to the finance ministry Ashok Kumar Lahiri will head a 10-member board which consists of as many as four former top bank executives such as Bhaskar Sen of United Bank of IndiaBSE -0.65 % and B Sambamurthy of Corporation Bank.
Multilateral financier International Finance Corporation and the Singapore government-backed GIC are expected to invest Rs 500 crore collectively in Bandhan Bank soon, taking the networth to Rs 3,200 crore.
IDFC Bank, which also got a license along with Bandhan last year, will begin its journey on October 1.
IDFC Bank, which also got a license along with Bandhan last year, will begin its journey on October 1.
Before this, Kotak Mahindra Bank and YES Bank were the last to grab private bank licenses on February 2003. Kotak was first to get off the block the next year, followed by YES Bank's beginning of journey on September 3, 2014, when Bandhan was operating as an NGO lending to the poor. Bandhan turned itself to a non-banking finance company in 2006.
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