Bandhan Bank plans to enter wealth management services

In a bid to provide holistic banking services, Bandhan Bank is planning to enter wealth management services.

Formerly a microfinance institution, Bandhan, in its new avatar as a bank, intends to start the services on a pilot basis in one of its recently opened high net worth individual (HNI, or rich person) branch in Kolkata. Bandhan is also looking to recruit specialised staff for its proposed wealth management foray. "Based on the success, we will expand the services further,"' said C S Ghosh, managing director and chief executive officer, Bandhan Bank.

Bandhan Bank will complete one year of its operations on August 23. The bank is increasingly looking at new customer segments, like non-residential Indians and domestic HNIs to expand its footprint. Recently, the bank has opened two HNI branches in Kolkata, with facilities like lounge and personalised banking. Earlier this year, the bank had unveiled two products - Visa international debit card and non-residential accounts - pointing towards the bank's strategy to look beyond rural finance.
 

While focusing at a new customer base, Bandhan Bank is going aggressive on deposit mobilisation in urban areas.

As a part of its retail deposit mobilisation plan, Bandhan has rolled out a daily deposit scheme by way of door-to-door campaign. Under the plan, representatives of Bandhan Bank will collect deposits in banknotes of small denomination, provide deposit receipts through a hand-held device, and open instant accounts.

'We have started a daily deposit scheme. Our bank staff go to the market on a daily basis and collect deposits, while opening accounts. For example, there are a number of small shops, where people are willing to deposit as low as Rs 200-300. The plan has been launched on a pilot basis," said Ghosh.

Bandhan Bank is yet to start large-scale retail (individual consumer) lending. Since the start, it has got Rs 15,500 crore as deposits. Unpaid loans for the bank stand at Rs 16,000 crore. More than 90 per cent of these loans have been made under the microfinance segment.

Bandhan Bank has been offering the highest interest rate on deposits at 8.25 per cent (with 0.5 per cent additional interest rate for senior citizens), which is around 25 basis points higher than the market rate.

Since the start, Bandhan Bank has opened close to 700 branches, and has a customer base of 8.9 million.

The bank had reported a net profit of Rs 275 crore for the period between August 2015 and March 2016.