Bandhan Bank looks to cross-sell insurance products, mutual funds

Bandhan Bank is planning to start cross-selling of insurance products and mutual funds through its branches by September.

According to Chandra Shekhar Ghosh, Managing Director and CEO, talks have already begun. He, however, did not specify whether it was general insurance or life insurance offerings or both that the bank was exploring, but maintained that “all possible options are being looked into”.

“We are in talks with some insurance companies and mutual fund players. By the end of the second quarter, you should see these offerings,” he told BusinessLine on the sidelines of 17 years of ‘Bandhan Konnagar’ – a not-for-profit organisation that Ghosh founded and is currently mentoring.

As the MD and CEO points out, the idea of cross-selling is not to shore up revenues, but to be a one-stop-shop for Bandhan’s customers.

In fact, Bandhan will initially start with such third party offerings across its metro and urban branches. It will then be followed by roll-outs across semi-urban markets with rural areas coming in at later stages.

“Obviously, the target audience in the initial days will be our metro and urban customers. Depending on the response, we will take it to other markets,” Ghosh said.

The bank already has 840 branches across the country and is planning to take the number up to 1,000 by end of FY18. Its customer base stands at 1.07 crore.

This year, Ghosh says, the plan is to increase business (both advances and deposits) by “at least 30 per cent” with a focus on the retail loans such as affordable housing and loans to small enterprises and so on.

Of the ₹23,500 crore-odd advances, nearly 91 per cent are micro-finance loans. The remaining 9 per cent are mostly retail offerings such as loans against property, housing loans, personal loans, two-wheeler and small vehicle finance options, gold loans.

While the focus on its retail portfolio will increase, the percentage break-up is not set for much of a change. In FY-18, it will be around 90:10 (micro-finance to retail).

“Advances in totality will grow. Hence, there may not be much of a change percentage-wise between micro-credit and retail loans,” he explained.

As a conscious strategy, the bank will still stay away from large corporate lending and farm loans as of now. (It however, does provide small agriculture loans for vegetable farming, fisheries, and so on.)

Meanwhile, Bandhan Konnagar, the NGO, will be holding GST sensitisation programs for small enterprises. It will also look to have an awareness drive on the need of Aadhaar cards.

The NGO already is working on financial literacy programs and on issues such as women empowerment, child education and so on.