Bandhan Bank, within five months of its operations, has achieved an unheard of feat of having a credit-deposit ratio of above 175% across India in contrast against the CD ratio for the banking sector as a whole which is now at four-year low of 74.85%.
For Bandhan it's highest for Bengal, followed by Bihar and Assam.
Maharashtra, meanwhile ranks second in terms of deposit mobilisation after Bengal.
"With a deposit base of Rs 7,000 crore and a proportionately high credit level of Rs 12,500 crore, we have achieved a credit-deposit ratio of more than 175%, which is unprecedented," Chandra Shekhar Ghosh, founder, managing director and chief executive officer, Bandhan Bank, told dna.
The key banking sector ratio, CD ratio measures how much of deposits have been used to give out loans, a bank's core business activity.
While a low CD ratio indicates idle cash and inefficient fund allocation, as been the case for the banking industry now, a high ratio indicates stress on capital.
But Bandhan has a unique positioning in the sector with a significant legacy retail portfolio of micro-finance loans, which existed even before the erstwhile micro-financier turned into a bank five months bank.
Among the states contributing deposits, after Bengal comes Maharashtra.
"In fact, we were surprised by the response we got from Maharashtra, maybe because of business activities in that state," Ghosh said.
But out of its 612 branches in total, a little over 50 are in that state.
"Since we create close relations with our borrowers, there exists a barrier, in terms of language and culture, for my staff, who are predominantly from Bengal, to go and work there. So we are creating new cadre with these skills for deployment before we expand our branch network of branches in states like Maharashtra," he said.
Bandhan is also studying the sectors that it can target for giving credit.
With a conscious decision to largely stay away from corporate lending, small housing loans and credit to small and medium sector have already been selected while others are in the process of being identified.
"In the next financial year we hope to expand the scope of our lending," Ghosh said on the sidelines of an event of Bengal Chamber of Commerce.
