Bandhan to focus on deposits in the initial years

Bandhan Financial Services, a micro finance institution (MFI), will initially focus on taking deposits after transforming itself into Bandhan Bank.
"In the initial period, the focus will be on garnering deposits from the public and then major lending activity will start," said C S Ghosh, Chairman and Managing Director of Bandhan.
MFIs are not allowed to accept deposits from the public. Bandhan has an asset base of around Rs 8,500 crore in the form of advances. Its liabilities are in the form of loans which it has taken from the banks.
Ghosh said that to create a greater liability base to help lending activity, Bandhan Bank will look to shore up its deposits.

However, it will continue with some lending activity after starting banking operations, expected to commence from September.
The bank will have to park a portion of its deposits with the Reserve Bank under the Statutory Liquidity Ratio norms, Ghosh told reporters.

With a capital base of Rs 3,200 crore, Bandhan would start operations pan-India with 600 branches, which would also have on-site ATMs.
The bank is also looking to expand in the southern states - Karnataka, Tamil Nadu, Andhra Pradesh and Kerala.
Bandhan got the in-principle approval last April from the Reserve Bank to start banking operations within a time-frame of 18 months.