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Bandhan hires Deloitte as banking consultant

LiveMint logoLiveMint 14-05-2014 Dinesh Unnikrishnan

Mumbai: Bandhan Financial Services Pvt. Ltd, one of the two entities that received in-principle approval from the Reserve Bank of India (RBI) to set up banks, has appointed Deloitte Touche Tohmatsu India Pvt. Ltd as a consultant to advise it on the banking entry.

Deloitte will assist the Kolkata-based microlender to chart out a road map to convert the entity into to a bank, said Chandra Shekhar Ghosh, founder and managing director of Bandhan.

In the recent weeks, Bandhan has been in discussions with a host of consulting firms such as KPMG India, Boston Consulting Group, McKinsey and Co. and EY India.

In April, RBI granted in-principle bank licences to IDFC Ltd and Bandhan to start new banks from a list of 25 applicants. These included Reliance Capital Ltd, Bajaj Finserv Ltd, Aditya Birla Financial Services Group, L&T Finance Holdings Ltd, LIC Housing Finance Ltd, Muthoot Finance Ltd and India Post.

Based in Kolkata, Bandhan is the largest microlender in India in terms of assets. As of 31 March, Bandhan had a loan book of `6,200 crore and 5.4 million borrowers. The company has 13,000 employees and 2,016 branches operating in 22 states.

Bandhan, in which the World Bank arm International Finance Corp. has a stake of 10.93%, has a capital base of `1,100 crore.

RBI issued the new licences to widen the reach of the `84 trillion banking industry in an economy where, according to a 2012 World Bank document, only 35% of adults have access to formal banking services.

The plan was first announced in February 2010 by the then finance minister Pranab Mukherjee in the Union budget. The last time RBI gave bank licences was 10 years ago—to Kotak Mahindra Bank Ltd and Yes Bank Ltd.

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