In­dia's mi­cro­fi­nance in­sti­tu­tion launches bank­ing ser­vices

The Pak Banker - - 6BUSINESS -

In­dia's largest mi­cro­fi­nance in­sti­tu­tion, Band­han Fi­nan­cial Ser­vices Pvt, launched its bank­ing oper­a­tions here with 600 branches spread across 27 states, 6.7 mil­lion cus­tomers, a loan book ex­ceed­ing Rs100 bil­lion (Dh5.54 bil­lion), and a po­ten­tial de­posit base of around Rs6.7 bil­lion. These are as­ton­ish­ing num­bers for any pri­vate bank in In­dia on the first day of oper­a­tions.

The bank will pri­mar­ily cater to the un­or­gan­ised 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 com­pete with the es­tab­lished ones such as the State Bank of In­dia and ICICI Bank, which are also in the race to have more cus­tomers from the non-bank­ing pop­u­la­tion. Presently, the bank has 600 branches, of which 200 are in metro and ur­ban cen­tres. The re­main­ing 400 are in the semi-ur­ban and ru­ral cen­tres, of which 40 per cent branches are in non-bank­ing ar­eas.

"Our pri­mary fo­cus will be the eastern re­gion where bank­ing pen­e­tra­tion is still poor," said Chan­dra Shekhar Ghosh, founder and chief ex­ec­u­tive of­fi­cer of Band­han. 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 In­dia and B Sam­ba­murthy of Cor­po­ra­tion Bank. Mul­ti­lat­eral fi­nancier In­ter­na­tional Fi­nance Cor­po­ra­tion and the Sin­ga­pore gov­ern­ment-backed GIC are ex­pected to in­vest Rs5 bil­lion col­lec­tively in Band­han Bank soon, tak­ing the net worth to Rs32 bil­lion.

The bank had an­nounced its plans to have sales ex­ec­u­tives with so­phis­ti­cated hand-held de­vices go to peo­ple aimed at get­ting more cus­tomers on­board the coun­try's new­est bank­ing en­tity. "We will have 12,000 field work­ers car­ry­ing de­vices pro­cured at a sum of Rs14,000 a piece, hav­ing mul­ti­ple func­tion­al­ity like ac­count open­ing, fund trans­fer, with­drawal, giv­ing trans­ac­tion state­ments, which would pretty much save its cus­tomers the trou­ble of vis­it­ing its nearby branches," Ghosh told Gulf News on the side­lines of the in­au­gu­ra­tion cer­e­mony.

The bank at present has a staff strength of more than 17,000, of which 3,000 are new re­cruits and 400 taken lat­er­ally from other banks. In­dia got its first pri­vate bank af­ter 11 years. Ko­tak Mahin­dra Bank and YES Bank were the last to be given pri­vate bank li­censes. "Band­han Bank is the first to be off the block as the new the new era ush­ers in the coun­try's fi­nance and bank­ing field," said Uday Ko­tak, head of Ko­tak group.

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