Bandhan Bank: India’s youngest bank has 1.48 crore accounts

Kolkata,Sumit Moitra: Since it commenced operations on August 23, Bandhan Bank has added 5 lakh new customers, taking the total tally to 1.48 crore accounts for 83 lakh customers.

In this short time, it has been able to open 5 lakh new accounts from those who are not its micro-finance customers existing before Bandhan Microfinance got evolved into a universal bank, said Chandra Shekhar Ghosh, founder, managing director and chief executive officer, Bandhan Bank.

But Bandhan’s biggest achievement, according to Ghosh, is shedding the perception of being a predominantly regional or Bengal-based bank.

“I was pleasantly surprised to find out during a recent assessment that close to 70% of the bank’s customers in Delhi are non-Bengalis. While similar data for Mumbai is not available, I guess the percentage would be at a similar level. This is a big relief as we were thinking Bandhan could have been perceived as a regional bank,” Ghosh told dna on the sidelines of Banking Colloquium organized by Confederation of Indian Industry.

Starting with 501 branches on the day of opening, Bandhan now has 510 branches and about 2,022 Point of Sales.

But for those who would like to avail loans from the country’s newest bank, there is a bad news.

Despite being flush with fresh capital from overseas funding agencies like World Bank-arm IFC and Singapore government supported GIC, the bank is yet to start fresh lending operations and is currently only test-marketing home and personal loan products.

“One of our priorities now is to stabilise the new system, which takes time. As it is, our loan book from earlier MFI operations is about Rs 10,500 crore, which we continue to support. We would start giving loans as a full-fledged bank once we build a good deposit base. Currently, we are just testing some products like home loans,” Ghosh said.

Even if Bandhan does not start lending to new clients, this Rs 10,500-crore loan book to existing clientele base would swell to Rs 13,000 crore at the end of the year, considering a 30% annual growth rate being seen in the MFI sector.

So, Bandhan needs to set aside capital for this growth from its small but growing deposit base before it starts giving out loans to its new customers.
“After opening their accounts with initial deposits of anywhere between Rs 500-Rs 2,000, our existing micro-finance customers who had taken loan, are depositing small amounts at a time when my staff reach out to them to collect their loan instalments.”

Apart from small deposits from its existing largely poor micro-finance customers, Bandhan is now garnering large deposits from new accounts holders in cities. “Response from Mumbai has been good particularly from the traders’ community,” he said.