Micro lender Bandhan today said it has received licence from RBI to start a full-fledged bank and will debut in August with up to 600 branches focusing on retail and small businesses segments.
"We have received the final bank licence from RBI today and will be starting operations with 500-600 branches on August 23," Bandhan Financial Services' director Chandra Shekhar Ghosh told reporters here.
The company, which along with infra lender IDFC was given in-principle nod last year to enter universal banking, has named it as "Bandhan Bank" and will focus on its strengths in retail and micro enterprises in unbanked or under-banked rural areas for the bank, he said.
Its entire current operations, including a network of 2,200 offices across 22 states, over 17,000 employees, 66 lakh customers and a loan book of Rs 10,000 crore, will be part of the bank from day one, he said.
The 500-600 branches will be freshly set-up and the 2,200 offices will act as door step service centres, he said, adding that 200 of the branches will be in metro and urban areas, and the rest will be in semi-urban and rural areas.
The eastern region, which accounts for 70 per cent of the MFI's business, will also occupy a big chunk for the bank, Ghosh said, adding that this is also essential as the banking penetration is lowest in such pockets.
The bank will have an ATM network of 250 on day one, and also associates, who have been serving the rural population in its current avatar as a MFI.
The bank is now calling these 12,000 associates as "HTMs" who will operate from handheld devices and undertake transactions like deposit and withdrawals done at ATMs.
Apart from the current states, Bandhan Bank will add four states in south India and Arunachal Pradesh to its network, Ghosh added.
There will be an infusion of Rs 500 crore by shareholders, which include IFC, SIDBI and Singaporean sovereign wealth fund GIC in the run-up to starting operations and the capital adequacy will be at 34 per cent.
The bank will not need any infusion in the first three years of operations, he said, adding that it will launch an initial public offer by 2018.
Ghosh said the bank will start lending from the first day onward but hinted that the ticket sizes will be smaller.
Once it transforms into a bank, it will lower its lending rate from the current 22.4 per cent, Ghosh said, adding that the pace of lowering the rate will be determinant on the pace of deposit accretion by the bank.
