Bandhan Bank CEO Chandra Shekhar Ghosh to step down when tenure ends in July

In a notice to the stock exchanges, the Kolkata-based bank said the board was informed of the decision at a meeting on Friday. In his resignation letter, Ghosh said he was looking to assume a broader strategic role after stepping down. However, he did not specify what his role would be.

“I am neither an economist nor a banker. I am a pure NGO worker,” said Ghosh, who has helmed the bank since its inception in 2015. “I feel happy to leave behind a strong franchise in the hands of a capable leadership team, many of whom have partnered me in building the organisation, brick by brick, sharing the same vision and values.”

While the bank’s board approved his reappointment for three more years in November 2023, the Reserve Bank of India has not yet cleared it. A banking analyst, who did not wish to be named, said Ghosh’s resignation was inconsistent with the board’s decision to approve the extension of his tenure.

“This possibly raises concerns that the RBI would not have approved the extension. Moreover, given the bank has seen attrition in management and faces the prospect of a forensic audit of its guaranteed portfolio, these developments do not augur well,” the analyst added. Big-four accounting firm EY is conducting a forensic audit on a portion of Bandhan Bank’s loan book that’s backed by government guarantees, Mint reported last December, citing two people aware of the development.

The audit was commissioned by the National Credit Guarantee Trustee Co (NCGTC), a state-run entity that operates and manages various credit guarantee trust funds of the government. It will cover Bandhan Bank’s loans of around ₹23,000 crore.

Bandhan started as a non-government office (NGO) in 2001, with a focus on women empowerment and poverty alleviation. In 2006 it acquired a non-banking finance company (NBFC) licence and was renamed to Bandhan Financial Services Ltd (BFSL). In 2014 it received a banking licence from the Reserve Bank of India.

“The biggest challenge was the blending of existing employees and newly hired talent with banking experience and ensuring that the cultural assimilation does not dilute the values of the organisation,” Ghosh wrote in his resignation letter.

Bandhan Bank, which launched with 501 branches and 50 ATMs in 24 states, was the first microfinance institution to become a universal bank in India. Its branches have more than tripled to 1,647 over the past nine years and it currently has 32.6 million customers. In 2019 it acquired Gruh Finance to provide affordable housing loans.

Ghosh recounted the challenges the bank has faced over the past few years, including demonetisation, cyclones in Assam, and the covid pandemic. “The pandemic impacted all, especially the ones who were at the bottom of the pyramid. After an extremely tough 2022-23, I am heartened to see recovery of the bank’s portfolio in 2023-24. As we reach business efficiency of pre-pandemic levels, the future looks promising,” he wrote.

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Published: 05 Apr 2024, 07:17 PM IST