Ghosh said the bank will be operating under two divisions – microbanking and general banking – and will offer complete retail financial solutions, including a variety of savings and loan products.
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As Firstpost noted in an earlier article, the RBI couldn’t have chosen a better candidate than Bandhan while awarding licences to the third set of private banks in India with the primary objective of promotion of financial inclusion.
In the state capital here to inaugurate Bandhan Bank, the senior member of the BJP-led NDA Cabinet also lamented the “obsolete policies” of the past which, he said, should be done away with.
“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.
The bank has sought some flexibility in operations from Reserve Bank of India. “It has already started working as an agency”.
Regulatory flexibilities, Ghosh later explained, would help Bandhan transform into a bank. Multilateral financier worldwide 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. “There are many challenges which call for some flexibility in regulations”.
GST will also add to GDP, he said, adding, “if we are able to increase the pace of our manufacturing growth, our services are in vicinity of double digit growth, the rain Gods have been kinder this year and therefore I do expect when compared to last year a significant improvement in agriculture”.
That doesn’t mean the bank will not be present in urban areas.
“I do hope (it is) this change of colour that has brought back both of them”, the finance minister said, pointing to the duo seated on the dais. (At that time) new institutions were not born and the existing ones shifted.
So, slowly a number of these exemptions are going to be phased out, he said.
“Fortunately we now have the advantage and benefit of technology which will take banking to every corner of the society…”
Perhaps, it would have made more sense if Bandhan chose to become a small finance bank, since such an entity perfectly fits into the stated scope and objectives of the organisation.
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.
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India has 27 state-run banks accounting for more than 70 percent of loans outstanding.
