Value from money: Chandra Shekhar Ghosh
As Managing Director and CEO of Bandhan Bank, Chandra Shekhar Ghosh is extending the reach of India’s first microfinance company-turned-bank to help rural communities.
Back in the late 1990s, Chandra Shekhar Ghosh was working with a microfinance institution in West Bengal. He travelled to rural areas of the state and learned about low-income families and how they managed their lives. "The opportunity to see what they were going through made me want to make a difference in their lives," he recalls.
On one occasion, he visited a local market and noticed someone giving 500 rupees to the fish vendor in the morning. This man returned in the evening to collect 505 rupees from the vendor. He realised that this man was a moneylender and was offering loans to the local shopkeepers.
When he spoke to the people there, they told him no institution or bank would offer a small loan and even if they agreed to do so they would charge usurious rates of interest.
He left his job and set up Bandhan Bank in 2001 as a microfinance organisation. The institution provided small loans to disadvantaged women. These women in turn invested these loans into income generating activities, thereby helping them to build sustainable livelihoods. Bandhan received its first funding from Small Industries Development Bank of India (SIDBI).
In 2009, Bandhan acquired a non-banking finance company (NBFC) and named it Bandhan Financial Services Pvt. Ltd., which grew to become the largest microfinance institution in the country. The NBFC then applied for a universal banking licence.
"Many of India’s banking institutions aren’t ready to go rural. We are searching for alternative ways to do our job."
In June 2015, Bandhan received the banking licence from the Reserve Bank of India. Bandhan Bank broke the mould in the country by being the first microfinance company to receive a universal banking licence. The bank’s vision is "to be a world-class bank for convenient and affordable financial solutions to all, in an inclusive and sustainable manner."
The transition over the past 18 years hasn’t come without challenges. The majority of Bandhan’s customers live in rural areas and the bank wishes to continue expanding and giving opportunities to people in these far-flung areas. "Things like internet connectivity and electricity are difficult in rural areas, and it costs a lot."
The team behind Ghosh is substantial; there are currently 33,000 people working to make his vision for Bandhan Bank come to life. The bank is continually conducting training through its residential training centres to help raise an excellent team. The loan officers of Bandhan meet their microfinance borrowers weekly, while the senior officials spend about 15 days each month in the field.
"They go out to the community, travel up to 12 kilometres per day to speak to people, understand their needs and build on them," says Ghosh. Bandhan Bank aims to make banking services available to all, especially the unbanked and unreached.
According to The Weekend Leader, Bandhan Bank has a social side too. It has a host of development programs under its CSR arm. They are varied activities in the fields of education, health, livelihood promotion, enterprise development and employment generation. All of these are aimed at developing the underdeveloped.
"There is still a large number of people who don’t have access to loans for a house."
Ghosh states on the company’s website that Bandhan Bank is "a universal bank and we have equal respect for all customers, big or small. Keenly focused on our customers, we aim to impact their lives with our bouquet of banking services to fulfil their financial needs." He believes in creating value for others and bringing growth to the nation.
Moving forward, the bank will extend its housing finance arm. Ghosh believes it is essential to contribute to the country’s housing industry and give shelter to those who otherwise may not be able to afford a house.
Bandhan Bank started with 501 bank branches, 50 ATMs and 2,022 doorstep service centres (DSC). Today, the company serves 17.8 million customers through 1,000 branches, 481 ATMs and 3,014 DSCs.
"There are still a large number of people who don’t own a house. With our affordable home loans, we hope they will be able to fulfil their dreams of owning a house," Ghosh says.
Bandhan Bank offers a wide range of banking services to meet the varied needs of its customers. Its mission is "to provide our customers accessible, simple, cost-effective and innovative financial solutions in a courteous and responsible manner. To create value for all stakeholders through a committed team, robust policies and superior systems and technology."
"I am proud of my team, my customers and partners, and the way they are helping us find success in our endeavour."
The bank has robust systems and technology. Its monitoring and supervision processes have been put in place to immediately address any issues and solve them. Partnerships with IT companies also help Bandhan Bank work to its fullest potential and reach more people in rural areas of India. Ghosh says, "I am proud of my team, my customers and partners, and the way they are helping us find success in our endeavour."
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