Bandhan Bank Won’t Lend to Corporates
CEO Chandra Shekhar Ghosh says the bank will focus on retail loans to the financially excluded
New Delhi: Bandhan Bank, a Kolkata-based full-fledged bank that started as a microfinance company, plans to stay away from corporate lending and instead focus on the financially excluded segment, its CEO Chandra Shekhar Ghosh has said.
“Most banks offer loans to only 10% of the population and are fighting for that segment. We are targeting those who are left,” Ghosh told ET.
He said Indian banks have so far concentrated only on the corporate sector and haven’t built up the skillsets to target the financially excluded. “There is a need to build up skills so that bankers can understand the credit need of this segment, identify right proposals, the amount to disburse, and even repayment,” Ghosh said. Bandhan Bank, which received banking licence along with IDFC in 2014, enjoys a niche in the increasingly crowded banking space because of its focus on the poorer segment. As much as 91% of its lending portfolio is in micro credit and 68% of its branches are in rural areas. Ghosh said his bank will continue to focus on retail loans mostly in the rural sector as it aims to build upon its strengths from its earlier operations in the microfinance sector.
The bank expects its credit portfolio to touch around ₹ 22,000 crore by March 2017 and aims to have a 50% year on year growth in all segments. The bank which has opened 805 branches in its 18 months of operations is also focused on its door step service centres, which has been its strength as a microfinance firm.
“The infrastructure in these 2,427 service centres is very simple and the staff is also simply dressed. The idea is to ensure that customers are not intimidated and we can understand and service their financial needs,” Ghosh said.
He said that most of the staff at over 500 branches of the bank are recruited from its microfinance operations, which ensures that their targeted customer base gets personalised services. The bank is also open to work Bandhan Bank to build upon its strengths in microfinance
Aims to monetise
priority sector lending portfolio of ₹ 22,000 cr by March 2017
Not keen on
lending to corporate sector CEO with new small finance banks and aims to monetise its priority sector lending portfolio to large banks that fail to meet the priority sector lending targets. Ghosh said the bank has not been impacted due to the demonetisation drive and expects some of the low cost deposits to stick. He said the bank has no immediate plans to list on stock exchanges as it has more than comfortable capital adequacy ratio at 29%. As per the Reserve Bank of India regulations, the bank will look to list after three years, he said.
It is also not looking to expand its branch network for the moment and will continue to focus on the eastern regions in the country, Ghosh said.
Expects credit 91% of its lending in micro credit, 68% branches in rural areas