Mumbai, May 16

Private sector lender Bandhan Bank is upbeat about growth prospects post the pandemic and believes credit demand is back. In an interview with BusinessLine, Chandra Shekhar Ghosh, Managing Director and Chief Executive Officer, Bandhan Bank, explained the reason for the delay in the bank’s diversification strategy and its housing finance business. Edited excerpts:


How is the bank doing post the pandemic, especially in the microfinance segment?

We provide credit to the last mile. People there are demanding work, businesses have reopened as mobility has started. The pandemic impacted, Kolkata and West Bengal, the business hubs of eastern India. Now, consumer demand is back and that is leading to credit demand across all segments, including food, travel, hospitality, garments and textiles.


How do you see credit demand in the new fiscal? Have you fully provided for Covid provisions?

We had fully provided for Covid in the second quarter of the last fiscal. We are not worried about asset quality and are happy with the bank’s performance. Advances growth for the bank was very good last fiscal and the loan portfolio grew 14.1 per cent year-on-year. We expect robust growth in advances as the impact of the pandemic has waned and this should be a normal year.


Why has the bank postponed the deadline for the diversification strategy to 2026?

In 2020 we made a five-year plan to diversify our operations, with a deadline of 2025. But the last two years were impacted by the pandemic and so we have shifted it to 2026. Our strategy aims to develop a couple of things. We want to bring down our micro credit portfolio to 26 per cent of total assets from 98 per cent, when the bank started. It was at 47 per cent last year. We also want to geographically diversify our portfolio and have more branches across the country. We also want to increase the secured portfolio.


How many branches will you open?

We did not open any branches in the last two years. We would like to open over 500 branches this fiscal and take our branch network to 2,500 by 2025.


How do you plan to expand your housing finance portfolio?

When we acquired GRUH Finance, its major portfolio was in West and South India and had less of a presence in the East. The bank has 1,189 branches as of now. We are trying to build up the housing finance business so that each branch has one table for housing loans so that it can service its customers. We have extended this to 400 branches and expect it to reach all major branches in the eastern region.


HDFC has a stake in Bandhan Bank. Will it be impacted by the HDFC and HDFC Bank merger?

HDFC is our investor. After the merger announcement, HDFC lowered its stake in Bandhan Bank to less than five per cent, which is permitted under the regulatory guidelines.


How will the acquisition of IDFC Mutual Fund impact the bank?

The acquisition was by a consortium led by the holding company. I cannot comment on it. It will be part of the Bandhan Group.