BANDHAN BANK

Recently, there is a buzz about BANDHAN BANK, Lets know about it:

 Bandhan Bank was set up in 2001 to handle dual objective of poverty alleviation and women empowerment.

 It was previously a Non - Banking Financial Company

(NBFC) butBandhan Bank received its universal banking licence

from Reserve Bank of India.

 The bank rolled out its services on 23rd August, 2015 (Founded).

 The bank started with 501 branches in all most 22 states in India which is highest branches of any private bank on the first day.

 The bank will provide funds to help and develop the Small and Medium Enterprises (SME).

 The saving interest rates have been fixed at 4.25% below Rs. 1,00,000 and 5% above Rs. 1,00,000.

 It is interesting to know that Bandhan was the only micro-finance institution that applied for a banking licence.

 Headquarters is located at Kolkata, West Bengal.

 Slogan of bank is "Aapka Bhala, Sabki Bhalai".

 Incidentally, Bandhan is the first bank to be set up in eastern part of India after Independence.

 MD and CEO of bank is Chandra Shekhar Ghosh.

PAYMENT BANKS VS SMALL FINANCE BANKS

Payment banks can receive deposits and remittances, but cannot lend, focusing on migrant labour and low income households.

Small banks will lend to “unserved and under-served sections”, including small business units, small and marginal farmers, and micro and small industries.

Payment Banks

Objective

Provide small savings accounts and payments /remittance services to migrant labour workforce and low-income households

Small Finance Banks

Financial inclusion and supply of credit to small business units and farmers through high-technology and low-cost operations

Eligible Promoters

Individuals or professionals with necessary experience and eligibility, existing NBFCs, corporate banking correspondents, mobile companies, supermarket chains, real estate co-ops and corporate entities

Resident individuals or professionals with 10 years of experience in banking and finance, companies and societies owned and controlled by residents, existing NBFCs, microfinance institutions and local

area banks owned and controlled by residents

Scope of Activities

Accept deposits but customer balance should not exceed Rs.1 Lakh

Basic services of accepting deposits and lending Cannot give loans, can issue ATM/Debit card but no credit cards 

No restriction on the area of operations Can distribute non-risk simple financial products such as mutual funds and insurance products 

At least 50% of its loan portfolio should constitute loans and advances of upto Rs.25 Lakh NRIs will not be allowed to open accounts 

Capital Requirement and Promoter’s contribution

Minimum paid-up equity capital of Rs.100 Crore/initially 40%, to be gradually brought down to 26% within 12 years from date of commencement