Bandhan becomes the first micro finance company to start operation as a

Bandhan Bank is the first private bank established as a scheduled commercial bank.

Kolkata: Amidst global slowdown, Finance Minister Arun Jaitley expressed confidence that 8-10 per cent growth rate is achievable on the back on increased investment and right mix of policies.

The Reserve Bank of India will issue licences to small finance banks to operate next month, RBI Governor Raghuram Rajan said on Thursday.

Ghosh started-off managing his family sweet shop in Bishalgarh near Tripura capital Agartala before studying in Bangladesh and working with BRAC, after which he moved to West Bengal and started Bandhan as a micro-credit entity.

With the launch of Bandhan bank’s commercial banking services, 500 branches will begin functioning across India.

There aren’t too many like Bandhan’s founder Chandrashekhar Ghosh, who understands the true sense of financial inclusion in a country, where half of the adult population is still unbanked. The effort by the bank administration, the effort by the government to infuse more capital, the effort to get more finance by divesting (government holding), and then greater discretion and more importantly addressing the concerns of each of (stressed) sectors.

That Bandhan Bank’s billboards feature Mamata’s favourite colours – blue and white, to promote which citizens have been offered civic tax breaks – appears to be little more than a coincidence.

Multilateral financier Interna-tional Finance Corporation and the Singapore government-backed GIC are expected to invest Rs 500 crore collectively in Bandhan Bank soon, taking the networth to Rs 3,200 crore. “And therefore returns will become simpler”, he said. In fact, the health of banks itself reflects on the challenges for the economy.

On Wednesday, the RBI issued the “in principle” approval to 11 applicants, including Reliance Industries Ltd, Aditya Birla Nuvo Ltd, Department of Posts and Cholamandalam Distribution Services Ltd, to set up payment banks. (At that time) new institutions were not born and the existing ones shifted. The remaining 400 are in the semi-urban and rural centres, of which 40 per cent branches are in non-banking areas.

So, slowly a number of these exemptions are going to be phased out, he said. Bandhan would have been ideal fit in this category given its sole objective on catering the poor-also a business model it understands very well. “So far we have generally seen, banks in India took in deposit from semi urban and rural and deployed the funds (as loans) to corporates”.

Bandhan bank is embarking on the next phase of its journey on a strong note, but on a path filled with tough challenges.