Bandhan Bank: Commercialisation to Deliver Financial Inclusion at Scale in India
Bandhan Bank, the first
microfinance institution (MFI) in India to receive a universal banking license
in 2015, has its roots as a non-governmental organisation (NGO) known as
Bandhan-Konnagar.
Bandhan-Konnagar,
the precursor to Bandhan Bank, was established in 2001 by Founder and CEO Chandra Shekhar Ghosh as a
non-profit. It sought to achieve sustainable
livelihood creation through financial inclusion and the empowerment of women,
by offering microfinancing services for unserved and underserved segments of
society in rural West Bengal.
To
access broader capital pools, Ghosh pursued a Non-Banking Financial Company
(NBFC) status for the company in 2006 through the acquisition of an already registered NBFC, renaming it Bandhan
Financial Services Private Limited (BFSPL). By 2010, BFSPL
became the largest MFI in India. In 2015, BFSPL was granted its universal
banking license by the Reserve Bank of India, and commenced operations as Bandhan Bank. This was an
inflection point for the company, as its transition towards a universal bank
model enabled it to achieve self-sufficiency.
Today,
Bandhan Bank operates branches in 34 out of 36 states and union territories in
India, with 73% in semi-urban and rural areas. Bandhan Bank remains committed
to providing affordable loans to low income women across India. Of its 26.5
million customers, 18 million are women who have a prior or existing
microfinance relationship with the bank.
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