The entity is scheduled to begin operations from Odisha with a proposed paid-up capital of Rs 25 crore
Johri and Sahu reportedly exited the bank as they wanted to set-up their own microfinance startup: Vector Finance. Sumit Sharma, former HR Head of Jana Small Finance Bank, is said to have joined them in their latest venture.
According to the report, all of them are seeking a non-bank finance company (NBFC) licence from RBI for their venture. "We plan to apply for a licence in the next 5-10 days, and will start lending on our own once we get RBI approval," Sahu told the paper.
The entity would operate from Odisha with a proposed paid-up capital of Rs 25 crore. It plans to begin operations shortly through business correspondent partners before it gets a formal NBFC licence from the central bank.
Johri's exit marks the first high-profile exit from the executive team of Bandhan Bank. "I have decided to begin something of my own, leveraging my rich learning from Bandhan Bank and my previous 25 years of banking experience," Johri told the paper.
Johri and Sharma will hold equal and a majority stake in the new venture, while Sahu will hold a minority stake, the report said.
As of now, they are raising capital from family and friends. "We plan to extend loans to small borrowers for income generating purposes. We will focus on select markets in eastern and central India," Johri said.
The move comes at a time when the microfinance industry registered a 51 percent year-on-year (YoY) growth as of September. This was, however, before the liquidity crisis hit NBFC and MFI sectors.
NBFC-MFIs, which controls 37 percent of the market, too have grown by 50 percent with a total loan outstanding at Rs 54,018 crore, according to Microfinance Institutions Network.Despite the resignation, shares of Bandhan Bank are up over 6 percent on news that the bank plans to add another 40 branches by December 31, taking its total network to 978.