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A Bank from Bengal for BharatFM inaugurates Bandhan Bank at an event which draws the bigwigs of banking fraternity and, Ghosh, the brain behind Bandhan, is hailed by all

Bengal’s First Since Independence: Bandhan, the micro-lender that has made inroads into the heart of Bengal, kicks off its journey as afull-fledged bank, steering the state to a new height at a time when business and industrial activities have suffered unabated downslide

Our Bureau

Kolkata: Bandhan Bank, the firstprivate bank to become operation-al in India in a decade, will focus onsmall and micro enterprises, besi-des micro loan borrowers, and ke-ep out of large corporate lending.

The first microfinance companyto transform into a full-fledgedscheduled commercial bank wasinaugurated by Finance MinisterArun Jaitley on Sunday.

“It is a landmark initiative in theservice of country and state,” Jait-ley said. “It is these entrepreneurs,many of them in unorganised sec-tor, who form the backbone of Indi-an economy.” According to the fi-nance minister, small entrepre-neurs — from shopkeepers tohawkers — are generating almost11-12 crore jobs while the large or-ganised industry is able to gener-ate only a small fraction of it. “Weare in the second phase of finan-cial inclusion after Jan Dhan Yoja-na,” Jaitley said. “The banking isgoing far beyond brick and mortarbranches with business correspo-ndences working in the villages.Expansion of this segment, alongwith the initiatives to set up 11 newpayments banks, will help peopleget rid of unreliable institutions.”

He was referring to the pyramidschemes run by money circulatingfirms such as Saradha, which hadmushroomed in the eastern re-gion, in the absence of robustbanking penetration. BandhanBank, which started off with 501

branches and 2022 customer ser-vice centres, try to raise its stake inthe bottom of the pyramid custom-ers with savings, remittance andinsurance services, even as the es-tablished ones such as State Bankof India and ICICI Bank are in arace to have more customers fromthe unbanked population.

It will stay away from large corpo-rate lending, managing directorand chief executive ChandraShekhar Ghosh said. It will contin-ue to cater to the unorganized sec-tor like daily wage earners andwomen running small businesses— the segments that had been itsborrowers for a decade.

Reserve Bank of India has turnedliberal in doling out banking li-cences to entities of different capa-bilities. It has just issued 11 in-principle licences to set up pay-ments banks last week and willannounce name of small financebanks licensees next month.

IDFC Bank, which also got a li-cence along with Bandhan lastyear, will begin its journey on Oc-tober 1. “We will pass on the bene-fits of lower cost to our borrowersas we start raising deposits,”Ghosh said. It has raised .̀ 80 croreworth of deposits the first day.

The company has 67 lakh micro fi-nance borrowers and their accou-nts have been transferred to thenew entity, creating a .̀ 10,240-crorestrong loan portfolio to start with.Its net worth is .̀ 3052 crore and ex-isting shareholders like IFC andSingapore sovereign wealth fundGIC are likely to invest .̀ 500 crore.

Bandhan is Born Again, ThisTime as a Bank

MD and CEO Chandra Shekhar Ghosh with FM Arun Jaitley at the launch of Bandhan Bank in the city on Sunday.

Our Bureau

Kolkata: The creation of Band-han Bank marks the return of en-trepreneurship in Bengal andthis would lead West Bengal to thepath of progress, Union FinanceMinister Arun Jaitley said onSunday. “A great institution is be-ing born in West Bengal,” Jaitleysaid. “The most important thingis the birth of a Bangla entrepre-neur, which is of utmost impor-tant for the revival and growth offundamentals of West Bengal,”he said after inaugurating thecountry’s first private bank in 11years.

Underscoring the importance ofeconomic activity in easternstates, Jaitley said that politicaldifferences between BharatiyaJanata Party and the TrinamoolCongress would not block the wayof development of West Bengal.

“The party to which I belong(BJP) and the party which rulesWest Bengal (TMC) are stronglyopposed to each other and thatprobably will continue. But interms of development of thiscountry and the state, the politicswill not matter and we will fullycooperate in the development andgrowth of the state of West Ben-gal,” Jaitley said, terming hisstance as “a break from some ofthe obsolete policies of the pastand the realisation of the poten-

tial of this area which is of ex-treme importance.”

He said that Prime Minister Na-rendra Modi has repeatedly de-clared that for further growth ofIndia, the growth of easternstates is important. West Bengal,which is known as the cradle ofscientists, economists, academi-cians, authors and writers, is nowcreating the Bangla entrepre-neur. “I think this beginning is al-so important in terms of the re-turn of entrepreneurship to thestate of West Bengal, which wasotherwise fleeing from the state. Ifthis were to happen, I am sure thestate would be on a great path toprogress.”

Bandhan Bank is the first bankset up by a local entrepreneur af-ter Independence. Uco Bank, thelast one to be set up in Kolkata,was founded by Ghanshyam DasBirla in 1943. State Bank of India,the country’s largest lender alsotraces its history to the formationof Bank of Calcutta in 1806, mak-ing it the oldest commercial bankin the subcontinent. Prince Dwa-rakanath Tagore, grandfather ofRabindranath Tagore, was an en-trepreneur and had foundedUnion Bank in Calcutta in 1829.The bank, however, failed in 1848.

In Ghosh, Jaitley Sees Returnof Entrepreneurship in Bengal

Union Finance Minister Arun Jaitley addresses the gathering.

Jaitley calls forpolitical harmony fordriving economicgrowth in the state

Our Bureau

Kolkata: The Bandhan Bank ex-periment may shape India’sbanking for tomorrow, felt thewho’s who of banking fraternitywho converged on the city onSunday to be part of the maidenbirth of a bank from a micro-lending company.

The formation of BandhanBank in fact, marked a new be-ginning of Indian banking,which in another one-and-a-halfyears will see emergence of pay-ments banks and small financebank. Reserve Bank of India hasdecided to offer licences to enti-ties with different capabilitieswith a single agenda in mind: im-prove financial penetration.

“India is home to several exper-iments and an MFI turning intoa bank is one such experiment,”former RBI deputy governorShyamala Gopinath said at pre-launch event on the eve of Band-han’s inauguration on Sunday.“Bandhan Bank is the first to beoff the block as the new changeis happening in the country's fi-nance and banking field,” UdayKotak, executive vice chairmanand managing director of KotakMahindra Bank, said at theevent.

West Bengal finance cum in-dustry minister Amit Mitra,

who was present at the inaugu-ral event, said that BandhanBank would serve the twin pur-pose of women empowermentand poverty alleviation. Band-han got a licence last year, alongwith IDFC, which will launchbanking operation on October 1.Competition will be intense inbanking with RBI surprising ev-eryone by offering 11 in-princi-ple licences to set up paymentsbanks. The regulator will an-nounce the name of small fi-nance banks licensees nextmonth. “This is a very excitinglaunch. India is changing not on-ly on the top, but also on the bot-tom-end,” World Bank countrydirector for India Onno Ruhlsaid. “It’s an experiment all of usare following keenly,” BSE’s ma-naging director and chief exec-utive Ashishkumar Chauhansaid.

Microfinance Institutions Net-work chief executive RatnaVishwanathan said that Band-han Bank was a culmination ofhard work and a dream. “It's en-try to the universal bank spaceaugurs well for the formal finan-cial service providers who lendto vulnerable and underservedpopulations because of Mr Gh-osh’s deep understanding of thecredit needs of this sector.”

Photos: Subhajit Pal

An ExperimentThat’s Poised toReshape Banking

Bandhan Bank MD and CEO Chandra Shekhar Ghosh greets RBI Deputy Governor HR Khan at the event.

Arun Jaitley lights the ceremonial lamp in presence of Bengal FM Amit Mitra.

Gulveen.Aulakh@timesgroup.com

New Delhi: Micromax isset to go the Xiaomi, Micro-soft and Samsung way. Thehomegrown company is de-veloping its own operatingsystem as well as a suite ofservices and apps which w-ill run across its phones, t-ablets, televisions and wea-rables, as it goes up the va-lue chain to differentiate it-self from increasing com-petition.

Spearheaded by former A-mazon executive Ashish A-grawal, who is the new tech-nology head at Micromax,the OS will be a forked An-droid – a platform developedon Google’s open source mo-bile OS. The first smart-phones with the new OS willbe available by the end ofthis financial year and theywill be affordably priced,Micromax cofounder VikasJain told ET.

“We’re excellent with part-nerships and we don’t wantto reinvent the wheel,” Jainsaid, while specifying thatthe company was not break-ing away from Android butwas working with the glob-ally dominant Android OSto bring a differentiated ex-perience to consumersacross all platforms, includ-ing wearables.

Agrawal said the likes ofApple, Microsoft and Xia-omi, which have their ownOS across platforms, aretranslating what they ha-ve done internationally toIndia. In contrast, Micro-max is closer to the Indianconsumer and thereforehas a better understandi-ng of the local market andinsights based on which itwill build the customerexperience.

“Our (Indian) use casesare much different from aUS or Chinese customer,”he said. As hardware is be-coming a commodity, Mi-cromax wants to start in-vesting in software todifferentiate itself. How-

ever, the company doesn’twant to alienate its set ofconsumers and develop-ers, majority of who areon Android, by buildingan operating system fromthe ground up. The No. 2handset brand in India,which closed fiscal 2015with .̀ 11,000 crore of reve-nue, sells about 3 millionphones a month, two-thirds of which are smart-phones, and has a 16.7% s-hare of smartphones and14.4% share overall devi-ces in the local market asper Counterpoint Resear-ch.

It is No. 3 in the tablet seg-ment with a 9% share forthe quarter ended March2015, according to Cyber-media Research, trailingSamsung and Datawind.

Jain said M-icromax isamong thetop five play-ers in the In-dian televi-sion marketwith an 8%share, sell-ing about70,000 unitsa month.Jain said thefirst ‘smart-

non-mobile device’ fromthe company stable wouldhit the retail market by theend of the year.

Despite its strong per-formance in the smart-phone and other productsegments, the company’sfuture growth would haveto come from servicesbuilt on top of its productsto ensure customer sticki-ness and brand loyalty – adifficult feat given Indianusers’ discerning and val-ue-for-money profile.

Over past year, Micro-max tied up with Cynogenfor using its OS on Yubrand of smartphones th-rough a wholly-owned su-bsidiary. The company ha-s also begun investing instartups that build servic-es which can be integrat-ed into devices.

Micromax MayUnveil Its OwnOperating System

OperatingSystemmeant towork acrossplatformslikely to beavailable byFY16-end

Pankaj Mishra & Anirban Sen

Bengaluru: State Bank of India isjoining the ranks of large corporatesstarting to tap into Bengaluru’s fer-tile startup ecosystem and engagewith early-stage firms, as the nation’sbiggest lender aims to catch up withnew-age, tech-savvy rivals amid a ma-

jor technology shift in the financialservices landscape.

Last month, SBI Chairman Arund-hati Bhattacharya sat in the frontrows of a startup session in the city,listening to how disruptive technolo-gies and fledgling ventures are takingover the financial services industry.

India’s largest conglomerates andother corporates are flying in to Ben-galuru to get a sense of the startupworld.

A dozen startups pitched before anSBI team, which included two of thelender’s board members. These star-tups included payment solutions pro-vider enStage, Khosla Labs-incubat-

nancial services, healthcare and re-tail. Many large traditional financialservices giants such as SBI are facingdisruption from the rise of new-agepayments banks, mobile wallets anddigital currencies such as Bitcoin.

“The rise of smartphones, paymentbank licences from RBI, unified pay-ment interface from the NationalPayment Corporation of India, thehuge amount of global capital com-ing into the payment industry will alllead to disruption,” Infosys cofoun-der and former chairman of the Uni-que Identification Authority NandanNilekani told ET in an interview lastweek.

have personally invited a few of theseguys for demonstrations at our officefor a larger group of audiences,” saidMahapatra.

A number of old-worldly Indian con-glomerates are now launching corpo-rate accelerator programmes and in-cubators to leverage the potential ofstartups.

Last week, the Aditya Birla Grouplaunched an incubator-like initiativecalled Bizlabs to collaborate withstartups. ET had reported earlier inAugust that the Aditya Birla Groupwas setting up a dedicated fund for in-vesting between $2 million and $10million in disruptive ideas across fi-

ed Novopay, business expensemanagement solution provider Hap-pay, online financial services plat-form Vote4Cash, financial researchfirm Probe Equity and online lendingplatform Capital Float.

“We were surprised to see how thesepeople are developing/ working ontechnologies to solve some of theproblems we didn’t even know exist-ed. It was very interesting to see howpoint-solutions by startups have thepotential to impact the banking in-dustry.” SBI Chief Information Offi-cer Mrutyunjay Mahapatra said in anemail to ET. “In fact, we were so im-pressed by the overall concept that we

Now, SBI Chairman Joins the Startup Gold RushNation’s biggest lenderaims to catch up with tech-savvy rivals

Product: ETNEWKolkataBS PubDate: 24-08-2015 Zone: KolkataCity Edition: 1 Page: ETKCPG5 User: shrutip1709 Time: 08-23-2015 22:11 Color: CMYK