Bandhan Bank to add 105 branches

The bank, which started operations on August 23, has 523 branches at present

Newly-opened private sector lender Bandhan Bank on Thursday said it planned to launch 105 branches in the next five months.

“We would like to see 628 branches by the end of March 2016,” Bandhan Bank CEO and Managing Director Chandra Shekhar Ghosh said. When asked if lower small savings rates would help new banks, he said it would make interest rate on fixed deposits more attractive and banks would benefit from the retail money flowing in.

The bank, which started operations on August 23, has 523 branches. About 70 per cent of the branches are in rural India, while 30 per cent are in hitherto unbanked rural pockets, with 83 lakh customers.

West Bengal has the largest number of branches, followed by Bihar and Assam.

Bankers have been demanding lower interest rates on small savings, as high rates on such government schemes makes fixed deposits in banks uncompetitive.

Bandhan Bank is the first instance of a micro-finance entity in India transforming into a universal bank. It received an in-principle approval from Reserve Bank of India in April 2014 and the banking regulator's final nod on June 17, 2015.

Its investors include IFC, SIDBI and Caladium Investment, a company managed by GIC Special Investments Pvt Ltd.

With small saving deposits commanding a rate of 8.7-9.3%, banks have been reluctant to transmit the entire policy rate reduction by RBI to the borrowers.

They want to keep their deposit rates attractive to match those in small saving schemes, which are popular among masses.

Bandhan Bank is the first instance of a micro-finance entity in India transforming into a universal bank. It received an in-principle approval from the RBI in April 2014 and the banking regulator's final nod on June 17, 2015.

Its investors include IFC, SIDBI and Caladium Investment Pte. Ltd, a company managed by GIC Special Investments Pvt Ltd.