Bandhan Bank:Still Continues to excite me.

It was the cover page that drew my attention to the book, and of course, the title, “Bandhan: the making of a bank.” I chose to read the book because I wanted to know how a lesser known micro finance institution had scaled up the heights and created history by transforming itself into a universal bank by challenging many corporate giants and even some government agencies. It sounded like the classic David and Goliath story. Second, I had heard conflicting accounts about Chandrasekhar Gosh, its founder and “dictator in action”. Even before I came across the book on Bandhan, I was familiar with the writer and his lucid and witty style of exposing corporate idiosyncrasies and hubris through his columns in the “Mint”..

Though the writer stresses that the book is not a paean to the remarkable achievement of Mr. Chandrasekhar Gosh, the founder of the Bandhan, nor a biographical narrative of Mr. Gosh, the tome is replete with copious accounts of the efforts and achievements of Gosh. And after completing the book the taste that lingers is of an epic effort by a man in building a corporate bank. This history of Bandhan is so tightly woven with the fate of Mr. Gosh that it is never easy to seprate one from the other. In addition to the story of Bandhan, the writer also touches on two more remarkable individuals in the world of micro finance: Mr. Vijay Mahajan of BSFL and Vikram Akula of SKS, and depicts a fascinating story of the challenges faced by the micro finance industry in the past. Through these chapters, the author further reaffirms the work ethic and vision of the founder of Bandhan, which took Bandhan way ahead of all its peers and finally took him to the realm of universal banking. 

Mr. Gosh hardly ever dreamed that one day his efforts will create a universal bank, the same goes for his colleagues and partners in the job. A trainer by profession, Mr. Gosh was a product of the micro finance revolution that emerged in the 1970s. As the writer aptly confers, Bengal was the cradle of banking during and before the British era. It had the rich legacy of the freedom fighters. Post-Independant Bengal could not see any leap in the economic front. This probably is the reason why the micro finance institutions mushroomed all over Bengal during the 70s and 80s. Bengal was famous for its achievements on the front of women empowerment: their most respected Goddess was Durga and she is venerated throughout Bengal. Like in other areas of world, here also the MFIs target was the hard working women on the rural areas belonging to the lower income segment of the society. Collective responsibility and social stigma are the checks and balances of the MFI business. People refrained from willful default of their loans for fear of social boycotting by their fellow group It is highly successful in small loans since the high risk can be compensated with high return. This was one of the challenges that Mr. Gosh and his team are going to face in the first phase of its banking operations. The high yielding loan book of the MFI had to be maintained and also to adhere the banking norms like CRR and SLR and also to adhere the fair practices code of lending as instructed by RBI. 

One thing that is remarkable in growth story of Bandhan is the professional way of handling things using the best available in the industry that Mr. Gosh engendered in the organization. System audit by Deloitte in 2005, E&Y in 2010 , Amarchand Mangaldas for legal counseling, Khiatan and & Co for extra legal support , Ogilvy & Mathers for branding and advertisement and FIS for core banking solutions rejecting other popular brands and the reasons for doing the same. Even the feasibility study was conducted using well known players in the industry. I still wonder how many banks in India is still using this much professional services for its specialized functions. It was not a blind bargain but carefully chosen step that these names will also add weight to the sprouting name of the brand Bandhan.Mr.Chandrasekhar Gosh’s association with international NGOs and MFIS and also his association with SIDBI and NABARD also helped him identify the right people for the right job. Top officials of the West Bengal governments were in the board of Bandhan during various periods. Top retired police officials were appointed in Bandhan to take care of its security task was another intelligent step everyone will appreciate if one knows about culture of Bengal and the working of MFI. The board of directors of Bandhan (headed by stalwarts like Mr. Ashok Lahiri !!) was also constitutes a rare mix of people with commitments and sincerity. Most of them are known names in their respective fields and better known persons in the Bengali neighborhoods.

Gosh knew very well that he could transform Bandahn Financial Services Ltd (BFSL) into Bandhan Bank but not its MFI employees in the top layer into banking. He selected a hoard of people from different banks and MFI and going through the website of the Bank, one is really convinced of the capability of people heading various verticals of the bank. All of them came with a tag of top corporate brands and they added the value to this sprouting bank. That’s where we truly understand the craftsman ship of the leader in Mr. C S Gosh.  

When Bandhan completes its one year journey on 23rd of August this year, I look forward to reading a good article that celebrates its legacy and contributions in any of the leading news papers. I would be happy to read that its growth is well nurtured and it has not distanced itself from its core values even after becoming a universal bank. I wish them a safe journey ahead. (This article is written in 2016 during the first Anniversary of Bandhan Bank )