FIS™ (NYSE: FIS), the world’s largest provider of banking and payments technology solutions and a global leader in consulting and outsourcing solutions, today announced it has been selected as the strategic technology partner for India’s largest microfinance institution, Bandhan, which is one of only two entities granted “in-principle” approval by India’s banking regulator to set up a universal bank.
The new banking licenses are part of an effort by India’s government to improve the country’s financial infrastructure, particularly in rural and semirural areas, because only 35 percent of Indians over the age of 15 currently have access to a bank account, according to the World Bank.
Bandhan, which is expected to commence banking operations in early 2015, started as a microcredit organization in 2001with the dual objective of poverty alleviation and women’s empowerment. Bandhan already operates as the largest microfinance institution in India with more than USD1 billion in assets serving over 5.8 million customers from operations in 22 states across India. The proposed bank will continue this microfinance activity but is also expected to offer differentiated banking products to untapped market segments in the vast rural and unbanked areas of India. In addition, Bandhan will offer premium services in the urban and metro areas with new service experiences for its affluent clients. To meet the needs of the market, Bandhan plans to commence banking operations with about 600 branches and 10 million customers.
As Bandhan’s strategic technology partner, FIS will provide and manage a fully integrated banking and payments platform through a totally outsourced delivery model, encompassing core banking, channel solutions, treasury, trade finance and an entire suite of payments services that includes switching, debit card management and interbank network connectivity.
“This exciting opportunity to work with Bandhan clearly demonstrates FIS’ proven capabilities in the provision of banking-on-demand solutions. Our comprehensive, in-country servicing capabilities will allow Bandhan to launch its operations whilst remaining focused on bringing financial opportunities to large numbers of people across India,” said Raja Gopalakrishnan, group managing director – Asia-Pacific, and COO, FIS International. “Bandhan is relying on FIS to manage its entire banking infrastructure so that it can focus on the economic needs of its customers and on how to most effectively promote its business.”
“We have a two-pronged strategy to reach customers in both urban and rural areas,” said Chandra Shekhar Ghosh, chairman and managing director, Bandhan. “To quickly and efficiently reach those people, we needed an IT partner who could provide a scalable, agile and cost-effective platform that would grow with our business. FIS was the clear choice.”