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.