Bandhan Bank Transforms Its Core Banking and Expands Digital Services with Oracle
Bandhan Bank announces the successful overhaul of its core banking system and the expansion of its digital services through a strategic collaboration with Oracle. Leveraging Oracle FLEXCUBE and Oracle Banking Digital Experience, Bandhan Bank has not only modernized its operations in Retail and Wholesale Banking areas, but has also introduced new digital capabilities implementing Oracle Payments, Retail Loan Originations, and services for Retail Internet and Mobile Banking to cater to millions of customers, particularly focusing on underserved segments within Indian society.
Bandhan Bank, serving a vast customer base of nearly 32 million through a robust network of over 6,250 banking outlets across 35 states (out of 36 states in India) and union territories, has consistently grown since its establishment in 2001. Originally founded as a not-for-profit institution, providing micro loans to underprivileged sections of the society, the bank has evolved into one of the fastest-growing private banks in India.
The rapid expansion prompted Bandhan Bank to work with Oracle, replacing legacy systems and manual processes with cutting-edge banking technology. The comprehensive transformation, including diverse businesses of Housing Finance, General Banking, and Microcredit (the largest in India), was successfully completed within a commendable two-year timeframe. The implementation of Oracle FLEXCUBE’s scalable and flexible platform, along with Oracle’s digital banking services, has significantly enhanced operational efficiency and elevated customer experiences.
“Our rapid expansion required us to rethink the structure of our core banking operations,” said Ratan Kumar Kesh, Executive Director, and COO of Bandhan Bank. He further highlighted that “Transforming our core processes and migrating to digital offerings with Oracle technology will give further boost to our growth and enable us to provide enhanced customer experience through innovative financial solutions.”
Bandhan Bank now efficiently streamlines General Banking, Housing Finance, and Emerging Enterprise Business (EEB) operations, offering end-to-end support for critical market functionalities, including Group Loans, Housing Loans, Personal & Vehicle loans, Payments, and Taxes, across its retail and corporate banking business verticals. The platform also introduces corporate banking modules to support the bank’s Domestic trade business and ensures a uniform approach for non-performing assets (NPA) processing across all its advances portfolios.
As an example, earlier, banking staff had the capability to initiate micro loans using handheld devices. With the implementation of Oracle’s mid-office loan workflow system, the process has gained enhanced autonomy. The system can independently originate loans or seamlessly resume processing from where the handheld left off, culminating in a more efficient and dependable origination and processing of micro loans.
The new technology has also enabled the bank to improve the processing to disburse the Small Business Loans, valued at INR 300+ crores (US$ 36.5 M) a day. The complete journey from loan application to sanction and final disbursement is seamlessly concluded within an impressively brief timeframe of just 3 days.
Compliance emerged as one of the vital driving forces for this transformation, with Oracle’s solution providing transparent data supported by documented business logic and a granular audit trail, ensuring comprehensive compliance across all aspects of Core and Digital Banking.
In addition to faster loan origination, Bandhan Bank can now offer its customers a seamless omnichannel experience, whether transacting online or visiting a branch, banking unit, or being served by bank staff. This includes empowering micro loan customers with the ability to make recurring deposits and create term deposit accounts to improve their savings habits. Oracle’s payment services further enhance operational capabilities, facilitating straight-through processing of domestic and cross-border payments for various business use cases, including vendor, retail, and corporate banking payments. This feature enables the bank to increase revenues through fee charging and recovery.
Looking ahead, Bandhan Bank is slated to unveil its own credit card. It is likely to be launched in early FY 2024-25, with Oracle’s digital and core banking serving as the front-end platform and the back-end customer store.
“With Oracle, Bandhan Bank can accelerate its go-to-market strategy across multiple banking business lines and achieve the agility with total compliance necessary to grow in India’s rapidly changing environment,” said Sonny Singh, Executive Vice President and General Manager, Oracle Financial Services. “Now, the bank can scale its operations in line with its rapid growth and more quickly bring new enriching and contextual experiences to its customers and continue its important mission of bringing financial opportunity to both the general and the underserved segments of Indian society, through digital access,” he emphasized.
