Finance

Bandhan financial institution to be careful about lending, to push for deposit increase

Bandhan Bank has cut the interest rate on tiny loans from 22.4% to 20.5% since it started to receive public deposits, Ghosh said.

Bandhan financial institution has reduce the hobby price on tiny loans from 22.four% to twenty.five%since it started out to get hold of public deposits, Ghosh said.
Kolkata: Even after becoming a complete-fledged financial institution, Bandhan financial institutionremains sceptical of venturing out of its erstwhile center commercial enterprise of giving tiny loans to thenegative.

inside the seven months till 31 March, Bandhan bank, which began off as a microfinance group in 2001, has built up a loan book of Rs.15,493 crore (which includes legacy belongings), however has lent most effective Rs.156 crore to customer segments formerly unknown to it.

On Friday, the financial institution stated in a regulatory filing that it had registered a internet profit of Rs.275 crore on total sales of Rs.1,082 crore, running as a bank on account that 23 August ultimate year.

Founder and dealing with director Chandra Shekhar Ghosh stated he changed into expecting creditboom of round 30% in the current year. however maximum of it’s going to come from its centerbusiness of creating small unsecured loans.

The financial institution has reduce the hobby charge on tiny loans from 22.four% to 20.5% because itstarted to receive public deposits, Ghosh stated.

nevertheless, its internet interest margin, the difference between the hobby earned by banks and theinterest paid out of funds, is a wholesome nine%. even though the boom capability outdoor thissegment is excessive, Ghosh stated the financial institution will be cautious and selective in its pursuit of diversification.

The financial institution will hold to push for increase in deposits. It had Rs.12,088 crore in deposits fromeight.4 million human beings on the quit of March, and within the cutting-edge year, it expects deposits to upward thrust as a minimum 30%, Ghosh said.

almost 21.55% of its deposits, or approximately Rs.2,605 crore, has come from low-price present daydebts and savings bills (CASA). nonetheless, its average value of deposit is nearly eight%, Ghoshstated.

many of the few companies that the financial institution has lent to is Wow! Momo, a Kolkata-primarily based speedy food chain seeking to increase across India.

The bank has given it a mortgage of Rs.7.nine crore, which includes a cash credit facility of Rs.1 crore.

Ghosh stated he changed into impressed with the firm’s expansion plans and profitability.

Sagar Daryani, a co-founder at the fast meals chain, said Wow! Momo currently has seventy five stores in six cities, and at the least 25 extra could be introduced by way of December. The loan from Bandhanfinancial institution may be used to set up a second manufacturing unit in Kolkata, he introduced.

among Bandhan bank’s different company debtors are a handful of microfinance lenders. It has lentround Rs.30 crore to such companies, Ghosh stated, adding that it enables to realize thoseorganizations and their line of enterprise.

threat-averse Bandhan bank’s net non-appearing assets (NPAs) on the quit of March made up zero.08% of its mortgage e-book, the lowest within the enterprise.

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