(26 August 2015 – India) The first new commercial lender in India in more than a decade has debuted, with Bandhan Finanicial Services Pvt opening 501 branches across the country.
Bandhan started as a microlender and already has 14.3 million accounts with a loan book of 105 billion rupees (A$2.18 billion) and 19,500 employees, with plans to expand by 26 percent by the end of March 2016.
The Kolkata-based lender is entering India’s mainstream banking industry while the sector undergoes further regulation to clean up the amount of bad loans in the economy.
Bandhan starts with a capital of 25.7 billion rupees, which will soon be raised to 30.5 billion rupees, versus the minimum requirement of 5 billion rupees, according to the statement on 23 August.
That translates into a risk-weighted asset ratio of 44.54 percent, the lender said.
India has 27 state-run banks accounting for more than 70 percent of loans outstanding.
The country’s 20 private lenders, led by ICICI Bank Ltd., held more than 19 percent of bank credit as of March 2013, while 43 foreign banks accounted for the rest, data provided by the Reserve Bank of India (RBI) show.
As per the RBI guidelines for new banks, Bandhan will consider an initial public offering in three years, Chandra Shekhar Ghosh, founder and chief executive officer, told reporters in Mumbai on 17 June.