Private sector lender Bandhan Bank, which started operations as a full-fledged bank from August this year, has garnered a deposit base of Rs 1,500 crore till date. "From August 23 (when the bank began operations) till date Bandhan Bank's deposit base crossed Rs 1,500 crore," CMD of bank C S Ghosh told reporters here on Monday.
He said that the CASA percentage was 26, the balance being term deposits. "It is very encouraging that the deposit base has been so good within such a short period. It is of great help to us," Ghosh said. Bandhan, which transformed itself from a micro-finance institution (MFI) to a bank, is seeking to shore up <g data-gr-id="183">its</g> deposit base as it could not do so in its erstwhile form.
Ghosh said existing equity investors like SIDBI, IFC and GIC Sovereign Fund of Singapore would jointly put in Rs 500 crore as additional capital in the bank. He has been elected to the management committee of Indian Banks Association (IBA). Bandhan Bank is the first instance of a micro-finance entity in India transforming into a universal bank. It received an in-principle approval from the RBI in April 2014 and the banking regulator's final nod on June 17, 2015. The bank has 523 branches at present.
Meanwhile, the capital requirement of Indian banks would cross the Rs 5 lakh-crore mark while meeting the global Basel III banking norms by March 2019, a study report said. “Given the credit growth expected in the short-to-medium term, the capital requirement of Indian banks would cross a huge level of Rs 5 lakh crore while meeting the globally mandatory Basel III banking norms by March 31, 2019,” a joint study Assocham-NIBM said.
On the other hand, banks in the public sector may find it very challenging to meet the Basel III requirements as a big chunk of funds is required to be inducted by the central government, which owns a majority stake in them, according to the study titled ‘Basel III standards: Concepts, Issues & Challenges’. “With the assumption of at least 20 per cent credit growth in the short-to-medium term, the core equity needs are likely to be Rs 1.75 lakh crore and non-equity requirements through tier-I and tier-II bonds to be Rs 3.25 lakh crore,” it said. Breaking it up further, PSU banks would need to bring in Rs 1.50 lakh crore while those in the private space would eye Rs 0.25 lakh crore.
“However, keeping in view the dismal performance by a majority of public sector banks in recent years, it shall be difficult for them to raise the capital of this magnitude from the market,” the study by Assocham-NIBM (National Institute of Bank Management said. Furthermore, raising non-equity capital through tier-I and tier-II bonds to the extent of Rs 3.25 lakh crore both by the government and private banks is equally challenging.
“This is due to the existence of a very limited market for tier-I and tier-II bonds. The success of raising capital through this route lies in the broad development of this market,” it added. While some of the major banks in India may turn to global markets, that route would bump up <g data-gr-id="178">cost</g> of capital significantly and put more stress on their profitability.