Table of ContentsIntroduction to Microfinance InstitutionsIntroduction to Bandhan BankRealizing its Vision and MissionRecent Developments Undergon by Bandhan BankThe Transformation of Bandhan from an NGO to a BankNeed of Banks in BandhanImportant Role Played by Bandhan BankConclusionIntroduction to microfinance institutionsMicrofinance institution initially had a narrow definition - the provision of microcredit to poor entrepreneurs and small businesses who do not have access to banking and related services. The two main instruments for engaging financial services with these clients or individuals were: (1) relationship banking for individual entrepreneurs as well as small businesses; (2) group models, in which several other entrepreneurs come together to apply for loans and other services as a group. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”?Get the original essayOver time, microfinance has become a broader movement whose goal is to create a world in which people and poor and socially marginalized households have access. to a wider range of affordable, high-quality financial products and services, including not only credit but also savings, insurance, payment services and remittances. Chandra Shekhar Ghosh founded Bandhan Financial Services Limited (BFSL) in 2001. This microfinance institution deals in providing loans to small customers, those who have no or less access to formal banking services. In June 2015, the banking regulator gave its final authorization. MFIs are financial institutions that work for the betterment of the needy and disadvantaged sections of society by providing short-term loans for setting up their own business or enterprise. They take minimal risk and then provide funding to interested borrowers to help them form, create, and manage a small business or enterprise. Microfinance institutions or MFIs, apart from providing financial assistance, also inform people about the current market trends of an economy and help them to compete in the current market and survive. These institutions generally do not take any collateral or ask for any collateral from the borrower before lending money. This is where these institutions differentiate themselves from traditional banking organizations. While banks are quite measurable before lending money to the sparse population of unemployed, considering them high-risk elements, MFIs are mainly dedicated to providing all the necessary financial assistance to this section of society. These organizations not only take the risk of funding them, but also work with them to ensure that the money donated is used appropriately. These institutions contribute in every possible way to uplift the weakest sections and make them financially independent. MFIs operate in many forms in India. Although each of them has different training and nature of work, they all provide financial assistance to the needy sections of society in the form of loans and other financial products. The different types of MFIs in India: JLG or Joint Liability Group SHG or Self Help Group Grameen Bank model rural cooperatives. Microfinance institutions serve as a bank and, in some sense, superiority because in addition to providing credit, they offer other financial services like savings, insurance and non-financial services like personal counseling, provide advice and support to get startedsmall businesses, etc. Over the past decades, it has provided money to unnoticed communities and thus helped to get rid of poverty. Bandhan's financial holdings are owned by Bandhan Financial Services Limited (BFSL), the largest microfinance organization in India. The bank is focusing on eastern India, as banking penetration is still low in the region, but at the same time wants to expand its loan portfolio by increasing lending funds to retail and micro and small and medium enterprises . Introduction to Bandhan Bank Bandhan Bank became the first microfinance company in India to start operations as a full-fledged commercial bank. Bandhan Bank became the first microfinance institution to transform into a bank. Bandhan Bank started operations after receiving in-principle approval from the Reserve Bank of India. Bandhan Bank was initially established in 2001 by Chandra Shekhar Ghosh as a non-profit microfinance institution with the primary objective of empowering women. After a few years, it transformed into a non-banking financial company (NBFC). Bandhan means unity and the mission and vision are reflected by its name. The main objective of Bandhan is the social uplift of women exploited by society. To achieve this goal, Bandhan engages in providing microfinance services to poor women living in rural and urban areas across the country. Bandhan has been involved in the distribution of microfinance services for 13 years. Realizing its vision and mission, Bandhan takes this opportunity to thank all those who have been associated with Bandhan and supported them in every possible way. Bandhan Bank was established with the desire to serve better. Bandhan Bank started with 501 branches, 50 ATMs and 2,022 home service centers (DSCs) on day one. Currently, Bandhan Bank has 3,550 touch points across India, comprising 832 bank branches, 2,437 home service centers (DSCs) and 281 ATMs, serving over 10 million customers. The bank has mobilized deposits of over Rs. 22,000 crores and its outstanding loan portfolio stands at Rs. 22,900 million. Bandhan Bank has a team of nearly 23,750 active employees. The Kolkata-headquartered bank has two divisions: general banking and micro banking, offering a suite of retail financial solutions, including a variety of savings and loan products. Currently, the savings account interest rate is 6% for balances above Rs. 4,000.1 lakh and 4.25% for balance up to Rs. 9,999. 1 lakh.Recent developments experienced by Bandhan BankBandhan Bank have changed the deposit rates downward by up to 50 points. Bandhan Bank plans to hire more people to meet the growing human resource requirements at branches and home service centers. Bandhan Bank will focus more on personal loans than corporate loans. Bank Bandhan to expand the level by adding 1000 chapters. Bandhan Bank has successfully onboarded five lakh customers since its inception. Bandhan's transformation from NGO to Bank Bandhan first started as an NGO and then achieved its position as an NBFC. Additionally, she continued to obtain a banking license. However, why does she need a banking license, when she carries out the main banking activity, namely lending? Although NBFCs perform similar functions to banks, there are few differences. One of the differences is that an NBFC is not allowed to accept demand deposits (DD), it is not part of the payment system, and the system.