Explore the History of Bandhan Bank

On 14-Jul-2024 By BANKROLL

Bandhan Bank is a commercial bank headquartered in Kolkata, West Bengal, India. It was established on December 23, 2014, and received its banking license from the Reserve Bank of India (RBI). However, the origins of Bandhan Bank trace back to 2001 when Bandhan, the parent organization, was founded as a non-governmental organization (NGO) focused on poverty alleviation and women empowerment initiatives in rural and urban areas of India.

Here is a brief history of Bandhan Bank:

1.    Foundation as an NGO (2001): Bandhan was founded as a microfinance institution (MFI) in Kolkata by Chandra Shekhar Ghosh, with the aim of providing financial services to underprivileged sections of society, particularly women.

2.    Growth as an MFI (2001-2014): Over the years, Bandhan expanded its operations and became one of the leading microfinance institutions in India, providing microloans to low-income households, primarily in rural areas.

3.    Transition to a Bank (2014): In 2014, Bandhan Financial Services Private Limited received approval from the RBI to establish Bandhan Bank. This transition from an MFI to a full-fledged bank was a significant milestone in Bandhan's journey.

4.    Incorporation as a Bank (2014): Bandhan Bank was formally incorporated on December 23, 2014. It began its operations as a commercial bank, offering a wide range of banking products and services, including savings accounts, loans, and deposits.

5.    Initial Public Offering (2018): In March 2018, Bandhan Bank went public with its initial public offering (IPO), which was highly successful, raising significant capital and garnering investor interest. This helped the bank to further strengthen its financial position and expand its operations.

6.    Expansion and Growth (2018-present): Since becoming a bank, Bandhan Bank has focused on expanding its branch network and customer base across India. It has introduced various innovative banking products and services to cater to the diverse needs of its customers.

7.    Regulatory Challenges (2018): Bandhan Bank faced some regulatory challenges related to its shareholding structure post-IPO. The RBI had imposed restrictions on the bank's branch expansion and CEO remuneration due to non-compliance with shareholding norms. However, the bank has since taken steps to comply with regulatory requirements.

Despite facing some hurdles, Bandhan Bank continues to grow and strengthen its position in the Indian banking sector, with a focus on financial inclusion and serving the unbanked and underbanked segments of the population.