1. ‘Bandhan Bank would like to postpone IPO if RBI permits’

‘Bandhan Bank would like to postpone IPO if RBI permits’

Bandhan Bank may postpone the mandatory initial public offering (IPO) issue, if regulator Reserve Bank of India (RBI) permits it. The private sector lender, which has just completed one year of operations, would like to have more time for listing of its shares on the stock exchanges.

By: | Kolkata | Updated: August 25, 2016 7:19 AM
“I would like to postpone the IPO, if RBI permits. We have not yet approached the central bank for the postponement. But we may approach for the necessary permission, if required,” Ghosh told FE. (Source: Reuters) “I would like to postpone the IPO, if RBI permits. We have not yet approached the central bank for the postponement. But we may approach for the necessary permission, if required,” Ghosh told FE. (Source: Reuters)

Bandhan Bank may postpone the mandatory initial public offering (IPO) issue, if regulator Reserve Bank of India (RBI) permits it. The private sector lender, which has just completed one year of operations, would like to have more time for listing of its shares on the stock exchanges.

As per RBI guidelines, Bandhan, which got the central bank’s approval to become a wholesale bank in August last year, has to go for an IPO in 2018. MD & CEO Chandra Shekhar Ghosh, however, said he will prefer more lenient terms for the timing of the listing for his bank’s shares as according to the on-tap universal banking licences guidelines, new banks will have to be listed within six years of the commencing business.

“I would like to postpone the IPO, if RBI permits. We have not yet approached the central bank for the postponement. But we may approach for the necessary permission, if required,” Ghosh told FE.

Elaborating on the subject, he said, “More time is needed to do the IPO in a better way. Three years time may not be enough. I am not saying I will postpone it, the timing will depend on business growth, demands for credit and market conditions.”

Bandhan, which was the first instance in the country of a microfinance entity transforming in to a universal bank, celebrated its first anniversary on Tuesday. Significantly, out of the 25 applications, only the Kolkata-based lender and IDFC had received RBI’s approval for a banking licence in April 2014.

“RBI has now released guidelines for universal bank licences on tap, where new banks will have to be listed within six years of commencing operations. But for us the timeframe is three years. I expect the same treatment from the central bank,” Ghosh averred.

Currently, Bandhan has 701 branches and nine million customers across the country. It has so far managed to collect deposits worth R16,000 crore, out of which retail deposit stands at more than R6,000 crore.

The bank’s lending target for this fiscal has already exceeded with its loan book standing at over R16,500 crore. Out of more than R16,500 crore advances, around R500 crore is in non-microfinance space — retail, MSME, and small corporate. Its capital base stands at R4,000 crore, while non-performing assets (NPA) is at 0.16%.

“People across the country have accepted our bank as it is evident from deposit mobilisation figures in different cities,” the CEO said, adding his bank aimed to open branches in every locality for more customer acquisition.

The bank plans to have a total of 1000 branches network in the next one year. It is going to launch its own United Payment Interface or UPI application to boost cashless transactions. “The new mobile application on payment gateway is coming soon. One customer can transact with Bandhan or other banks through this application even if he does not have an account with us,” Ghosh said.

He, however, pointed out that till now for a large number of people digital banking is not acceptable as they prefer bank branches for making transactions. Pan-India, around 33% of Bandhan’s branches are in unbanked rural areas, as against RBI’s stipulation of 25%.

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