India’s top microfinance company Bandhan Financial Services Ltd, which is close to launching India’s newest private bank, is likely to get a second round of capital infusion from existing backers International Finance Corporation (IFC) and the Singapore’s sovereign wealth fund GIC.
Bandhan had raised around $260 million earlier this year from IFC, GIC and state-run Small Industries Development Bank of India (SIDBI) 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. Bulk of this came from GIC.
Chandra Shekhar Ghosh, director of Bandhan Financial Services, told The Economic Times on Thursday that the fresh investment of Rs 500 crore would directly go to the upcoming retail bank.
An email sent to the company’s spokesperson seeking further details on the development did not elicit any response.
The MFI, which started its micro lending operations in 2001, announced its plans to start operations on August 23 from its home city Kolkata, on Wednesday. It operates with a workforce of 17,000 employees and 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.
“We will be a bank for all, but our primary objective will be to serve the unbanked,” Ghosh had said while announcing the launch of banking operations early this week.
While the upcoming bank already has net worth well above the RBI stipulation, new round of infusion would help it push through its plans to open 500-600 branches across India with focus on Micro Small & Medium Enterprise and Small & Medium Enterprise units.
The next step for Bandhan will be to comply with RBI guidelines and list its shares on the stock exchanges within three years.