Jaitley says China devaluation may have transient impact on India

Inaugurating the Bandhan Bank, the first commercial bank from Eastern India to get RBI clearance since independence, Shri Jaitley said 17.5 crore bank accounts have been opened in Jan Dhan Yojana scheme so far. IDFC, the other successful applicant, is to start operations in October.

“Bandhan Bank is the first to be off the block as the new the new era ushers in the country’s finance and banking field”, said Uday Kotak, head of Kotak group. This translates into 44.54 % capital to risk weighted assets ratio or CRAR for the new bank, signifying its robustness.

The bank had also announced that while it will keep the base rate for lending at 12 per cent, it will pass on every reduction of cost of funds to the borrower.

Regulatory flexibilities, Ghosh later explained, would help Bandhan transform into a bank. The bank will also offer savings, remittance and insurance services.

Meanwhile, Ghosh requested that the banking regulator should be considerate and flexible with some regulations as the bank will be operating in the unbanked and rural areas with little or no financial literacy. For most existing private sector banks, financial inclusion has remained an activity forced by regulation than commitment or a viable business proposition. RBI’s deputy governor HR khan said regulatory issues are being considered sympathetically.

Already having 501 branches pan-India with 50 ATMs, it plans to increase the branch count to 632 and ATM count to 250 across 27 states by the end of the current fiscal year. Ghosh estimates that deposits will grow in line with Indian banking growth rates. We will also have branches working all seven days of the week.

“I do hope (it is) this change of colour that has brought back both of them”, the finance minister said, pointing to the duo seated on the dais.

The savings bank account interest rate has been fixed at 4.25% for balance up to Rs.

The Reserve Bank of India’s licensing norms stipulate that a new bank must have at least Rs 500 crore capital.

Jaitley said that the banking network is expanding much, while the health of banks reflects on the challenges for the economy.

“What is most important is the birth of a Bengal entrepreneur, which is of utmost importance for the revival and growth of the fundamentals of Bengal”, he said.

Referring to the manufacturing sector in West Bengal, he said at another event that the state government would have to be manufacturing-friendly like the governments of Karnataka and Andhra Pradesh.