'Bandhan will continue to focus on rural and semi-urban areas'

Q&A with CS Ghosh, managing director and chief executive officer, Bandhan Bank

With Bandhan Bank commencing operations today, it now faces the challenge to position itself as a universal bank. To begin with, Bandhan Bank will go slow in lending, but will be aggressive in deposit mobilization. In an interview with Namrata Acharya, C S Ghosh, managing director and chief executive officer, Bandhan Bank, says the bank will look forward to have nearly 30 million customers in the next five years, and hopes to bring down its base rate in around a year's time.

How would you like to see Bandhan positioned in the next five years?

It is a difficult question to answer now. But definitely, in the next five years, we would like to have nearly 30 million customers.

Your lending rates are quite high, when do you expect to bring down the lending rates.

This will take at least a year. The lending rate will depend on the cost of funds. As and when we have enough deposits to bring down the cost of funds, we will reduce the base rate. We will pass on every reduction of cost of funds to the borrower. Our deposit rates are already little more than the market rate, which should help us garner deposits.

What kind of credit and deposits growth are you looking at by the end of this year?

The industry wise deposit rates is close to 14%. We would not like to grow below the industry growth rate. The credit growth rate cannot exceed the deposit rate. So the credit growth target will be decided accordingly.

Are you looking to raise any funds in the near future?

We are very well capitalized at the moment. We expect capital infusion from two of our investors, IFC and GIC soon, which will take our capital base to nearly Rs 3,052 crore, against the regulatory requirement of Rs 500 crore.

What will be your strategy on corporate lending?

Corporate banking is a different kind of skill, which we are yet to develop. We will continue to focus on rural and semi-urban areas, particularly the SMEs.

Can you elaborate on what kind of relaxations you sought from the regulator?

At present, the banking industry is catering to one kind of people. Now, it will cater to a different set of people, which might need some relaxations.