The country’s top microfinance group Bandhan Financial Services has received the final approval from RBI to start its bank and expects to start operations from August 23, it said on Wednesday.
Kolkata-based MFI, which started its micro lending operations in 2001, was one of the two companies besides IDFC to receive RBI’s in-principle approval for a banking licence in April last year.
The MFI had raised $260 million from International Finance Corporation, Singapore’s sovereign wealth fund GIC, and the state-run Small Industries Development Bank of India earlier this year to expand its net worth to Rs 2,700 crore, well above the RBI stipulation of minimum capital base of Rs 500 crore for new banks.
“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,” said Chandra Shekhar Ghosh, director of Bandhan Financial Services Ltd.
The first branch would be opened in Kolkata.
The MFI which operates with a workforce of 17,000 employees has added 850 experienced banking professionals at senior and middle level positions to run its operations over the last year while also appointing five specialised entities for a smooth transition into the banking business. Deloitte Touche Tohmatsu India Pvt. Ltd. Is consultant for the banking project; FIS is the information technology (IT) partner; Aon Hewitt designed the human resources and compensation policy for employees; Madison Media is helping with advertising campaign; and Ogilvy & Mather is handling the brand-building exercise.
“The bank will specially cater to the need of Micro Small & Medium Enterprise and Small & Medium Enterprise units,” Ghosh further added.
MFIs have attracted lot of private capital over the last year, with the sector finally leaving behind its past with the regulatory crisis in state of Andhra Pradesh following farmer suicides.
With Bandhan leading the way, most of the big MFIs have applied for a small finance bank license. As the government focuses more on financing the bottom of the pyramid and with its plans to provide a back up of Rs 20,000 crore via MUDRA bank, the sector is expected to grow much more in the coming year.