BIKASH
CHOUDHURY
23 August
2015 would go down in the history of Indian Banking with the
Inauguration of Bandhan Bank---149th schedule commercial bank. It is
Historic because RBI in its wisdom has taken the second initiative after
Regional Rural Bank to make the banking services available to uncovered or
under covered rural areas and demography with granting a commercial banking
license to Badhan Bank; whose focus would be SME in Rural & semi-urban
areas. Badhan Bank is starting with a capital of Rs.2570 Crore, little over
five times of the RBI new norm; and, it has 501 branches, 2022 service centers
and 50 ATMS across 24 States and
has plan to scale up to 632 branches,250 ATMS
in 27 States in next 18months(by 31March 2017).
It would have been much better if Bandhan Bank
concentrated on the eastern region of the country with a strategy to saturate
the demand for banking services in the area and captured idle cash sitting in
rural homes (in RBI assessment 42 % of the total Idle cash remain in
rural areas) and met the financing requirement of new social groups and
youth apart from its traditional base of women self help groups and NGO. It
could have claimed some viability gap funding from central govt. for bringing
Idle cash into the mainstream in the entire eastern region. Since, Bandhan Bank
has its strong base in the region; it could have scaled up much faster to
completely cover approximately over 1.5 lakh villages in next 5 years and
captured the benefit of economies of scale and lower span of control to manage
the cumbersome and mammoth banking operations. This certainly could have created
an economic multiplier effect and push up our GDP
by 0.5-1 %. In contrast, spreading the Banking operation of Bandhan Bank thinly
across the country would push the cost of operation quite unnecessarily and
would result in faster burn out of valuable and expensive capital; thus,
repeating 3 mistakes of Regional Rural Bank (Gramya Bank) in their lives.
In India
we rarely understand the satisfaction of completing a task; rather, enjoy
keeping a few half completed or uncompleted tasks which is a bane of Indian
mindset that holds up the country from faster progress and advancement; be it
in technology or business.
There is a huge
opportunity for Bandhan Bank to be able to spruce up our rural economy by
adding Agricultural & Agro Consulting Division to its operation to offer
practical guidance to farmers with their crop plan, its processing, storage and
marketing with deployment of suitable technology at a fraction of the cost of
public sector banks and at the same time could add an additional revenue stream
to its existing portfolio. Over a period of time Bandhan Bank could also
attempt to create entrepreneurs in rural areas in the domain of food
processing, warehousing, cold storage and logistics. In five years from now
Bandhan Bank could turn out to be one of the largest and most profitable
commercial banks of the country knowing the virgin market and untapped
potential of a universal bank at a lower transactional cost.
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