MICROCAPITAL BRIEF: Indian Microfinance Institution Bandhan Financial Services to Apply for Banking License

Indian microfinance institution [MFI] Bandhan Financial Services Private Limited (Bandhan) reportedly plans to apply for a banking license after the Reserve Bank of India [RBI] finalizes its new guidelines for establishing new banks [1]. This move, which would open up deposit-taking opportunities for Bandhan, is intended to approximately double the number of people Bandhan serves to 6.5 million [2]. The recent equity investment by the World Bank Group's International Finance Corporation [IFC] in Bandhan, which was covered last week by MicroCapital, has brought Bandhan's net worth to INR 600 crore (USD 127 million), surpassing the INR 500 crore (USD 105 million) minimum capital requirement expected to be finalized by RBI for new banks [1,3]. Chandrashekhar Ghosh, chairman and managing director of Bandhan was quoted as having said,”We expect that IFC's induction as equity investor would give the banking regulator the confidence to give us a... Continue reading here.