City-headquartered Bandhan Bank  on Sunday became the first universal private bank in eastern India to begin its journey post independence with 1.43 crore accounts in place and a loan book of Rs.10,500 crore backed by capital of Rs.2,570 crore.

 

 

 Bank founder and managing director Chandra Sekhar Ghosh – son of a sweet shop owner in Tripura's Bishalgarh – said its capital infusion is much higher than the Reserve Bank of India's licensing norms which stipulate Rs.500 crore capital for new banks.

 

 Ghosh, who in 2001 set up the microfinance firm Bandhan which has now evolved into a bank, said the capital will soon be ramped up close to Rs.3,052 crore which will translate into 44.54 percent capital to risk weighted assets ratio for the new bank.

 

 Inaugurating the bank, union Finance Minister Arun Jaitley said: "A great institution is being born in West Bengal as Bandhan now evolves from a micro-finance institution into a regular bank. Ghosh tells me their priority is going to be the small and medium enterprises. Its a landmark initiative in the service of the country and the state."

 

 Already having 501 branches pan-India with 50 ATMs, Bandhan Bank plans to increase the branch count to 632 and ATM count to 250 across 27 states by the end of the current fiscal.

 

 Ghosh, 55, said Bandhan will prioritise on giving loans to the rural unbanked people besides mid-sized regular loans, but avoid large corporate loans altogether in the initial years of its operation.

 

 "The micro-small-medium sector in the country needs lending support and we will strive to meet their demands," he said at the launch.

 

 Seventy one percent of the bank's branches will be in rural India and at least 35 percent of the total branches will be in unbanked rural pockets.

 

 Ghosh said the bank will be operating under two divisions – microbanking and general banking – and will offer complete retail financial solutions, including a variety of savings and loan products.

 

 The savings bank account interest rate has been fixed at 4.25 percent for balance up to Rs.1 lakh and five percent for balance above Rs.1 lakh. For term deposits, the maximum interest rate has been fixed at 8.5 percent for one to three years, with an additional 0.5 percent for senior citizens.

 

 Bandhan Bank is east India's first private bank post independence and the first bank to open in the country after more than a decade.

 

 Its former entity as a micro-lending firm had kept its bad loans as low as one percent which the bank will strive to maintain.

 

 West Bengal Finance Minister Amit Mitra and Reserve Bank of India deputy governor H.R. Khan were present on the occasion.