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India's youngest bank Bandhan to empower women, rural folk
Sunday July 20, 2014 8:33 PM, Sujit Chakraborty, IANS

Innovative microfinance company Bandhan will operate as a bank from October next year and focus on empowering women and rural people, says its chairman and managing director Chandra Shekhar Ghosh.

"Bandhan Financial Services Private Ltd (BFSPL) would start its journey as India's youngest bank from October next year," Ghosh told IANS in an interview.

"By October next year, we have to fulfil certain guidelines of RBI to become a full-fledged bank in India. We are now working day and night to achieve the goal," he said.

Ghosh said Bandhan would build on its experience as a micro-financier and as a bank strive to strengthen capacity building of people.

"Long back, a poor but energetic woman in a village in West Bengal had taken loan from us, Rs.3,000, for making 'Muri' (puffed rice); after a year she came to us seeking a loan of Rs.20,000 to increase her selling. There are thousands of such instances happening in rural Bengal."

Kolkata-based Bandhan was set up in 2001 as a micro-finance institution.

Bandhan (meaning togetherness or bonding) provides loans of a minimum of Rs.1,000 and maximum of Rs.5 lakh for small trading activities and from Rs.1,000 to Rs.10,000 for non-business activities like building a sanitary latrine and for children's education.

"Our people every day meet around one million people in eastern India and other parts of the country to change their mindset on social uplift and economic emancipation by covering them under the micro-financing. The main thrust of Bandhan is to work with women, who are socially destitute and economically exploited."

For the first time in 10 years, Mumbai-based IDFC and Kolkata-based BFSPL were selected by the Reserve Bank of India (RBI) earlier this year to set up banks, from among 25 non-banking finance companies (NBFCs).

"Bandhan works to bring one out of every four rural households under its roof as 65 percent of rural populace in India does not have bank account or is not getting any kind of banking services," said Ghosh, who was born in western Tripura and studied in Bangladesh and Kolkata.

Currently, Bandhan is working in 22 states and union territories through a network of over 2,016 branches with more than 5.6 million customers. But the priority areas are in West Bengal, Bihar, Odisha, Jharkhand, Uttar Pradesh and northeastern states.

"We have disbursed Rs 328,290 million as of now and our loan book stands at Rs.62,629 million. We have a dedicated, committed and direct workforce of 13,192 employees."

Ghosh said RBI Governor Raghuram Rajan wants the new bank (Bandhan) to penetrate poverty-hit rural areas to promote lending and saving among farmers, small businesses and others whom traditional banks have been reluctant to serve.

"Bandhan is a third generation bank. Instead of ATM (Automated Teller Machine), our 275,000 human teller machines have been in constant touch with the rural people, specially women."

Ghosh said that he had all the time given emphasis on the "practicability of the business, whatever may be the volume of trade."

Ghosh also said that the International Finance Corporation (a member of the World Bank group) has proposed to tie up for a long-term strategic partnership.

The IFC is currently (since 2012) holding 12 percent equity stake in the company.

Bandhan has been getting advances from 33 banks including the Small Industries Development Bank of India (SIDBI).

Bandhan also runs 600 primary schools in four states - West Bengal (370), Assam (100), Bihar (80) and Tripura (50) -- for poor kids and many training centres for the skill development of its employees.

(Sujit Chakraborty can be contacted at


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