Bandhan appoints Delloite for banking foray

West Bengal-based Bandhan, the country’s largest microfinance institution, has stepped up efforts to seek banking licence. The MFI has appointed consultancy firm Deloitte for preparing blueprint for banking foray, as it plans to submit its application by June.

Once Bandhan gets the banking licence, the MFI would be converted into a full-fledged bank, with the microfinance operations merged with the bank, said  Chandra Shekhar Ghosh, Chairman and Managing Director, Bandhan.

Recently, the MFI inducted two new board members, including V K Chopra, former chairman and managing director, Corporation Bank.

With about 85% branches in rural areas, Bandhan has about 1,800 branches.

Also, against the regulatory requirement of Rs 500 crore, Bandhan had a paid up capital of Rs 900 crore, said Ghosh.

Reserve Bank of India (RBI) released its guidelines for licensing of new banks in February this year. According to the guidelines, entities or groups in the private sector and Non-Banking Financial Companies (NBFCs) shall be eligible to set up a bank through a wholly-owned Non-Operative Financial Holding Company (NOFHC).

“We need to examine the holding company structure. If required, we might need to tie-up with a technical partner for support,” said Ghosh.

The guidelines require banks to be listed within three years of business. Licence seeker should have ten years of successful financial track record, sound credentials and integrity, according to RBI.