Bandhan Financial Services is in the process of getting final approval from the Reserve Bank of India for starting banking operations. The approval is expected by the end of this month, CS Ghosh, Chairman and Managing Director, Bandhan, told reporters on the sidelines of a banking summit organised by the West Bengal chapter of the Association of Micro Finance Institutions (AMFI) on Wednesday.
Bandhan, the country’s largest MFI, and IDFC, were given provisional banking licences by the RBI earlier this year.
According to Ghosh, the date for starting banking operations will be decided after obtaining the approvals.
Fund infusion will come from its existing investors, including GIC Sovereign Fund of Singapore, World Bank’s corporate financing arm International Finance Corporation (IFC) and Small Industries Development Bank of India (SIDBI).
“This tranche is expected just before we start banking operations,” he said.
Bandhan had earlier this month received equity infusion of ₹1,020 crore from these institutions.
GIC has invested around ₹641 crore, IFC ₹344 crore, and SIDBI around ₹35 crore taking the capital base to ₹2,616 crore.
Loan book Bandhan’s loan book stood at ₹9,600 crore in fiscal 2015. It grew by over 57 per cent or ₹3,500 crore, compared to the year-ago period.
While approximately ₹2,000 crore (or over 30 per cent) of this increase came from existing customers, the remaining ₹1,500 crore came from new additions. In FY15, it added 110,000 new customers, taking its customer base to 66 lakh.
Branches and ATMs Meanwhile, Bandhan is looking to start banking operations before September with 600-odd branches across the country.
It also has plans to set up about 250 ATMs across urban and metro centres. Ghosh did not share the cost of putting up these ATMs.
It has, however, spent approximately ₹20 crore towards purchasing 14,000 handheld devices for its field staff. The devices will be used to carry out banking and immediate update of transactions once the MFI starts offering banking services.
SLBC meetings For the first time, the West Bengal Government has asked Bandhan officials to attend its State Level Bankers’ Committee (SLBC) meetings.
The meetings are usually attended by bankers and State Government officials to deliberate on the amount of credit flow to banks.