India: Bandhan Bank Will Usher in A New Model in Financial Inclusion - CMD

Sep 2014
India, September, 09 2014 - When Bandhan Bank roll outs its services across the country in October 2015, it will be a bank with a difference.

The plan is unique. Bandhan will start its journey with 600 branches. The microfinance company’s existing 2,016 offices will operate as sub-branches, each having an army of salaried field staff to take banking to the villages.

“We will operate in a hub-and-spoke model,” says its Chairman and Managing Director, Chandra Shekhar Ghosh. While the nitty-gritty is yet to be finalised, Ghosh says he will bring about a new model in financial inclusion by connecting consumers, right from the large cities to the remotest of remote villages.

Fresh recruitments

Keeping in line with its micro-financing business, the largest in the country, half of the Bandhan Bank network will be in the nooks and corners of West Bengal. Overall, nearly 70 per cent of the network will be in five States - Bengal, Bihar, Odisha, Uttar Pradesh and Assam.

The rest will be spread across other States. The four southern States will have three branches each. Overall, there will be around 3,000 people managing the core banking.

While efforts are on to train some of its existing 13,000 employees in banking activities, indications are that Bandhan will go for nearly 3,000 fresh recruitments. “I anticipate the final staff strength to be 16,000,” says Ghosh.

East focus

Ghosh is clear that he is not going to run after the creamy layer so far as lending is concerned. Instead, he will try to bolster lending activities to those in the small and unorganised sector who cannot meet the rigorous paperwork that commercial banks require.

While it is costly to take banking to the doorsteps of rural depositors, Bandhan wants to bank on the un-banked to make money.

A vast rural presence brings an added advantage - scope to sell other financial products.

“We already have a tie up with Life Insurance Corporation of India. Going forward we will explore this opportunity further,” he says.

Remittance potential

Going deep into the rural areas of Bengal and other eastern States will also help Bandhan tap the remittance market. Most of these States are exporters of labour to other parts of the country. Due to low banking penetration in villages, remittances mostly come through informal arrangements or channels. Ghosh wants to tap this source of funds. In fact, the bank’s branches in the South will be in areas dominated by Bengali labourers.


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