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Bandhan Financial Services has, ahead of its scheduled conversion into a full bank by September, stepped up its lending activity.
In the past financial year, ending March 31, it recorded a 56 per cent growth in the gross loan portfolio. This is the highest the micro finance institution has seen in three years.
With a client base of nearly 6.5 million, Bandhan expects to start a full-fledged bank with a balance sheet of nearly Rs 11,000 crore, the portfolio size expected by September. With an existing retail base in rural areas, it is expected to expand the client base in semi-urban areas and cities, to segments like medium and small enterprises. Borrowers with a loan requirement between Rs 50,000 and Rs 20 lakh are expected to be the target client base.
"We have seen very good credit growth in the past year, a conscious step to increase credit growth as we plan to enter the banking sector," said Chandra Shekhar Ghosh, chairman.
At the end of 2014-15, the gross loan portfolio was Rs 9,530 crore against Rs 6,107 crore in FY14. Loan disbursement grew 63 per cent to Rs 14,988 crore. Once Bandhan turns into a bank, the MFI portfolio will be shifted to the bank's books.
Bandhan plans to open 600 bank branches at one go. It has constituted a 25-member team for core operations, mostly from top private and public sector banks. It has also recruited a workforce of about 3,500, taking its total staff strength to 16,000.
It has also got commitments to raise its core capital by about Rs 1,600 crore, with capital infusion from International Finance Corporation, an arm of the World Bank, and GIC, the Singapore governent's wealth fund. After these, the capital base would be close to Rs 3,200 crore.
So far, Bandhan has appointed five specialised agencies -- Madison Media for an advertising campaign, Ogilvy & Mather for brand-building, FIS for the information technology platform, Aon Hewitt for personnel policies and Deloitte as a consultant -- for the banking foray.
On April 2, 2014, the Reserve Bank of India granted in-principle approval to Bandhan for setting up a bank. The approval is valid for 18 months.
