Bandhan became the first new private bank to start operations in 11 years as Finance Minister Arun Jaitley inaugurated the lender's business during the weekend. The bank was launched with 501 branches, 2,022 service centres and 50 ATMs across 24 states.
Singapore's GIC- and IFC-backed Bandhan, the largest microfinance lender in the country, is one of the two entities granted licence by the RBI to start banking operations last year. IDFC, the other successful applicant, will start operations in October.
"We will continue to focus on rural and semi-urban areas. However, give us some flexibility,” said Chandra Shekhar Ghosh, managing director and CEO of Bandhan while seeking relaxations from the RBI.
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.
Parag Jariwala, VP – institutional research, banking and financial services, Religare Capital, said growth will be moderate in the short term and there would be no scope for margin expansion as Bandhan Bank wants to pass on every reduction in cost of funds to borrowers.
“Success depends on creating strong deposit franchise and developing skill set in corporate/SME lending which is difficult and will come with experience," he added.
Bandhan Bank had last month appointed noted economist Ashok Lahiri as chairman of its board.