Gurudwara Banda Ghat Sahib , about two furlongs upstream from Nagina Ghat is the spot where Madho Das, a hot heated and headstrong Bairagi Sadhu,had his abode. Guru Gobind Singh had heard about him from Mahant Jait Ram of Singh Dadu Dwara. His original name was Lachhman Das. He was native of Rajauri in Jammu and Kashmir. A Rajput by birth he had been trained in the martial arts and had been fond of hunting. A chance killing of a pregnant doe at his hands transformed him first into a remorseful sinner in search of redemption, and later, after having acquired some occult powers through austerities and single minded Devotion to learning of such arts, into an arrogant recluse impatient with lesser mortals, Guru Gobind Singh, within a few days of his arrival at Nanded came to see him here, according to Bhatt Vahi sources on 3rd September 1708. Madho Das was not in his hermitage then, and the Guru decided to wait for him. It is said that in order to test the Bairagi's mettle, the Guru deliberatly provoked him by having some of the former's goats slaughtered by the Sikhs. This naturally put Madho Das besides himself with anger as he returned to his hermitage and found the trespass and he sacrillege, and he at once involed his occult powers to bring the trespasser to his knees, but finding them ineffective, he himself took little time to realise and acknowledge the spiritual superiority of the Guru, at whose feet he at once surrendered himself. The chroniclers narrate their brief introductory conversaton thus:

The Guru : "Who are you" 
Madho Das : "I am a Banda (lit man as well as a slave)" 
The Guru : "Whose Banda" 
Madho Das : "Yours my Lord"

The Guru blessed him and raised him to his feet. He later administered Khande di pahul to Madho Das and renamed him Banda Singh (Gurbakhsh Singh according to some sources, but the name Banda stuck and he is known to historians by his popular name as Banda Bahadur or Banda Singh Bahadur). During the next four weeks, the Guru instructed him in the essentials of Sikh faith, assessed his potential as a leader and briefed him about impending mission; and a few days before the stabbing incident, Banda Singh was on his way to Punjab accompanied by five Singhs whose counsel, the Guru commanded he was to heed, although he would be the supreme commander in the impending campaign. Gurudwara Banda Ghat for short, is housed in a single square room with a covered circumabulatory passage around it (Rebuilt since)

This Gurudwara is also on the left bank of the Godawari at a stone's throw distance from Gurudwara Nagina Ghat Sahib. Here at the time of Guru Gobind Singh Ji's arrival at Nanded, Banda Bairagi was living.

He was of Rajput origin but had left hunting after having killed a pregnant deer and had become disciple of a Vaishnav Saint. On wandering he had come to and settled at Nanded. He had controlled various evil spirits and was in the habit of enchanting people with his supernatural powers. Guru Ji came to his place and sat on bairagi's cot. First of all the "Bairagi" tried his best to turn the cot with the help of his supernatural powers, but when failed, became disciple of the Guru and begged for pardon. Guru Sahib baptized him and made him jathedar of sikhs. After sometime Guru Ji gave him five arrows, twenty five sikhs, nishan Sahib and a kettle drum and sent him to Punjab to set right the evildoers and the cruel rulers.