A Grassroots Financier
Born in a refugee family which came to Kolkata in 1971 from Bangladesh, Chandra Shekhar Ghosh had no degree in finance or management. But this did not stop Ghosh to transform his microfinance company into a full-fledged bank. In a chat with Entrepreneur India, Ghosh, Founder, Managing Director and CEO, Bandhan Bank, talks about his entrepreneurial journey and the challenges he faced to reach this level.
How did the idea of starting a bank come to you?
After losing my father, the responsibility of my family fell on my shoulders since I was the eldest of all siblings. I managed to complete my studies and started working with an NGO in Bangladesh. Although it was a stable job, I decided to quit because I wanted to do something of my own. I came to West Bengal, started providing capacity building to local microfinance institutions. I also worked with an NGO for a short period.
I saw poverty very closely and had the opportunity to learn about the people living in the interiors of rural areas. I noticed local vegetable vendors borrowing money from money lenders on a daily basis at an exorbitant rate. They would not mind paying so much since this money was available to them in a convenient, fast and hassle free manner.
It was then I thought of lending to this underprivileged section of the society by borrowing from banks. Bandhan was conceptualized in 2001 and since then there has been no looking back. The organization was set up to address the dual objective of women empowerment and poverty alleviation.
Bandhan – A name that attracts many. What’s the story behind it?
Bandhan means bonding or togetherness. We share a strong connect with our customers and employees. It is like a big family. The team works together in order to serve the not-so-privileged people in a better manner. The name, Bandhan, is nice and simple. When we transformed from a microfinance institution into a bank, we thought of continuing with the same name – Bandhan Bank.
How do you make your bank stand out against other banks?
Ours is a bank with focus on the eastern region of the country, where a large number of people are unbanked even today. People living in rural areas and bottom of the pyramid are more unbanked as compared to others. So we are designing the bank in such a way that we can cater to all. The bank functions through two divisions.
The first is the micro banking division, which presently has 2,022 Doorstep Service Centers reaching the doorstep of more than 7.7 million customers who have been mostly unreached by banks.
The other division is general banking, which has 612 bank branches functional under it, catering to 418,000 customers belonging to the middle and high classes of the society.
In this manner, Bandhan Bank is already catering to more than eight million customers and hopes to reach out to many more in order to serve them and make significant contribution to bring about financial inclusion in country.
You must have faced certain challenges while turning a microfinance institution into a bank. What were those?
Bandhan is the first instance in the country of a microfinance institution becoming a bank. This wasn’t an easy task, and we had to face certain challenges. First, establishing the IT infrastructure was a challenge. Second, capacity-building of existing human resource was a huge task. We needed to build capacity for the existing 13,500 employees who were working with the microfinance institution.
Third, many experienced bankers we had hired came from different cultures, so blending the cultures was not easy. We had to ensure that existing employees and new recruits work together as one team. I am glad we have been able to successfully do so.
How big is your bank in terms of branches?
Presently, Bandhan Bank is operational in 27 states with 612 branches, 2,022 Doorstep Service Centers and 203 ATMs, catering to over eight million customers.