Bandhan says will serve the poor even as a bank

Microfinancier Bandhan Financial Services, which is set to enter the big league of scheduled commercial banks, on Wednesday said it continues to be focused on the low-income groups and ''unserved'' territories.

Bandhan, which has been granted a banking licence, early this year, under the Reserve Bank's latest licensing round, is currently in the process of charting its course in the banking domain.

The micro finance institution, hopes to continue to use its existing operational geography in rural areas for both deposit mobilisation and lending activities.

Chandra Shekhar Ghosh, chairman and managing director of Bandhan, said the small and tiny businesses, which Bandhan has served so far, are in the process of graduating to bigger firms and could fit in well into a bank's portfolio.

''We have captive deposit areas too. For scaling up, of course, we would tap the rich, the urban middle-class and youth who are just on the threshold of becoming bankable,'' he said at an interaction organised by the MCC Chamber of Commerce and Industry.

Ghosh, however, said much of Bandhan's established credit delivery model, spread of network in rural hinterland, particularly in the east and the north-east, relationship-based financing, and recovery system would be extended to the proposed bank.

Bandhan, he pointed out, has a cash-flow based lending and biometrics-enabled KYC (know your customer) that would be a differentiator of Bandhan's banking model.

''We intend to continue to bring banking services to the doorsteps of savers as well as depositors,'' Ghosh said.

Monish Shah, senior director of Deloitte Touche Tohmatsu, which is helping Bandhan transform into a bank, said a new market opportunity was emerging for the smaller players in the banking space.

Small-size banks will gravitate to niche markets left out by the big players. The largely unserved MSME (micro, small and medium enterprises) sector will also be among Bandhan's priorities.

Bandhan has an 18-month timeframe for setting in place the required infrastructure, and after turning into a bank, it plans to float an IPO  within three years.