Bandhan Bank is an Indian private sector commercial bank headquartered in Kolkata, West Bengal. It commenced banking operations in 2015 after its parent organisation, Bandhan Financial Services, transitioned from being one of India's largest microfinance institutions into a universal bank. The bank is known for its strong roots in microfinance and its extensive presence among unbanked and under-banked customers, particularly in eastern India.
| Type | Private sector bank |
|---|---|
| Industry | Banking, Financial services |
| Founder | Chandra Shekhar Ghosh |
| Commenced banking operations | 23 August 2015 |
| Headquarters | Kolkata, West Bengal, India |
| Country of operation | India |
| Listed on | BSE, NSE |
Background
Bandhan was originally established as a microfinance entity by Chandra Shekhar Ghosh, focusing on extending small-ticket credit to women borrowers and low-income households, particularly in West Bengal and other eastern Indian states. Over time it grew into one of the largest microfinance institutions in the country.
In April 2014, the Reserve Bank of India (RBI) granted in-principle approval to Bandhan Financial Services to set up a universal bank, making it one of only two applicants approved in that round, alongside IDFC. This approval marked the first time in nearly a decade that the RBI had issued such licences, and Bandhan became the first microfinance institution in India to be converted into a full-fledged universal bank.
History
- 2014: Bandhan Financial Services received in-principle approval from the RBI to operate as a universal bank.
- 2015: Bandhan Bank commenced operations on 23 August 2015, with branches across multiple Indian states from day one. It was inaugurated in New Delhi by the then Union Finance Minister, Arun Jaitley.
- 2018: The bank's initial public offering (IPO) was launched, and its shares were subsequently listed on the BSE and NSE.
- 2019: Bandhan Bank completed the acquisition of Gruh Finance, a housing finance subsidiary of HDFC, through a share-swap arrangement. The merger expanded the bank's footprint in affordable housing finance and helped diversify its loan book away from a heavy concentration in microfinance.
Operations
Bandhan Bank operates as a universal bank offering a range of products including savings and current accounts, fixed and recurring deposits, retail loans, micro loans, small enterprise loans, housing loans, and third-party financial products such as insurance and mutual funds. A significant portion of its lending portfolio is directed toward microcredit, with women borrowers forming a large share of its customer base.
The bank has a wide branch and banking-unit network spread across most Indian states and union territories, with a particularly strong presence in West Bengal, Assam, Bihar, and other eastern and north-eastern regions of India.
Leadership
Chandra Shekhar Ghosh served as the founding Managing Director and Chief Executive Officer of the bank from its inception, having previously led Bandhan Financial Services. He is widely associated with the institution's identity and its focus on financial inclusion.
Significance
Bandhan Bank is considered a landmark case in Indian banking history because it demonstrated a pathway for a microfinance institution to evolve into a regulated universal bank. Its model has been studied as an example of mainstreaming financial inclusion within the formal banking sector, particularly through its outreach to small borrowers and rural customers in regions where conventional banking penetration has historically been low.
Related topics
- Reserve Bank of India
- Banking in India
- Microfinance in India
- Gruh Finance
- Chandra Shekhar Ghosh
- List of banks in India
- Financial inclusion
References
- Wikidata entity: Q19882235
- Reserve Bank of India announcements on bank licensing (2014).