Though the latest PNB fraud might have cast a shadow on corporate banking and lending segments in India, Chandra Shekhar Ghosh, founder and CEO of Kolkata-headquartered Bandhan Bank, feels that the retail banking segment has a huge potential for growth in India due to the vast unbanked and untapped customer base in the country particularly in the rural areas.
“We see huge potential in the basic retail banking services in India as customers are bound to use the basic services of the banks. We are only focusing on retail banking as of now and have seen healthy traction in this business. Corporate banking is a very complicated business and we have not ventured into it. Ever since we entered the banking business more than two years back we have had very good experience in this field though a huge chunk of our business is still in the microfinance field,” Ghosh told THE WEEK as the bank's IPO kicked off on Thursday.
The bank hopes that the IPO would further build customer trust and help the company in attracting good investors. The IPO will close on Monday, March 19.
Ghosh said that it is the ability of a bank or a microfinance institution to build a trust with its customers that matters the most in attracting and retaining them. He added that a microfinancing business, in particularly, runs on trust and still forms a huge chunk of the company's overall business. “Though, now we are also in the banking business our micro finance business is still very strong, particularly, in the rural areas of the country, and we have centres across India to cater to our micro finance customers. A customer meets a micro finance institution regularly and there is regular interface with the customers and that helps build their trust,”added Ghosh.
Interestingly, Bandhan Bank is one of the only private sector banks headquartered in Kolkata and now has Pan India presence. It is also expanding rapidly. “In India, a lot needs to be done in the rural parts of the country to bank the unbanked population and our aim is to tap this segment by providing them banking services. According to reports, India, though it has around 70 per cent of the total population living in rural areas, there are only 34 per cent of total bank branches that cater to them. On the other hand, only 30 per cent of the country's total population lives in the urban areas. But there are around 66 per cent bank branches to cater to their banking needs. So the potential to tap the rural population is huge in India,” remarked Ghosh.
Ghosh says that a major challenge that retail banking faces in the country is dearth of skilled manpower to handle the segment and a lot of skilling needs to be done in this field. “We have set up training centres to skill our staff in the retail banking space and the training is yielding us good results,” said Ghosh.