SINGAPORE - Singapore sovereign wealth fund GIC is investing 10.2 billion rupees ($220 million) in India's Bandhan Financial Services, which is setting up one of the country's two newest banks, its chairman told Reuters on Tuesday.

When contacted by the Straits Times, GIC confirmed the investment but declined to comment on the exact value invested.

The company will get a total equity investment of 16 billion rupees, including 5.8 billion rupees from existing investor IFC, the private sector investment arm of the World Bank, Bandhan chairman and managing director Chandra Shekhar Ghosh said.

In April last year, Bandhan and IDFC were the only two lenders to receive in-principle bank licenses form the Reserve Bank of India for the first time in a decade.

Kolkata-based Bandhan, a specialist in microfinance or small-value loans, said it would have a capital base of about 32 billion rupees after the latest round of investment, with the combined holdings of GIC and IFC making up more than half.

This is more than the minimum capital requirement of 5 billion rupees to set up a new bank, fixed by the Reserve Bank of India.

"With the new investment, we are ready to soon launch a well-capitalised, robust universal bank which can focus on building assets and managing risks competently," Mr Ghosh told Indian media.

The new Bandhan Bank will operate about 600 branches across India, with 10 million depositors and a loan book of close to 80 billion rupees ($1.73 billion), said Bandhan in a press release issued Monday.

The Small Industrial Development Bank of India is also an existing investor in Bandhan, according to Bandhan's website.