Kolkata: Micro finance company Bandhan, which has operations in the easter and North-eastern part of the country, Monday said it would approach the Reserve Bank for securing a banking licence.
"Under the new banking licensing guidelines announced by the Reserve Bank of India (RBI), we want to convert Bandhan from an NBFC to a bank," Bandhan Chairman and Managing Director Chandra Shekhar Ghosh told reporters here.
"Since micro finance institutions (MFIs) were not allowed to accept deposits, converting Bandhan into a bank would help
in accepting deposits from the public," he said.
This would also help in reducing the cost of funds, which would in turn reduce interest rates, he said.
"At present, we are doing the preparatory work needed for applying for a banking license," he said.
IFC, the investment arm of the World Bank, had picked equity worth Rs 135 crore in Bandhan, he said.
Ghosh said with IFC's inclusion, the networth of Bandhan would rise to Rs 650 crore by March, 2012 from Rs 600 crore at present.
Bandhan would also extend its operations to Indonesia and Ghana by entering into joint ventures with MFIs in the two countries.
During the current fiscal, the MFI would raise capital of Rs 2,400 crore, out of which Rs 500 crore had been already raised.
First Published: Monday, September 5, 2011, 18:15