After serving Bandhan Bank for almost nine year, Chandrasekar Ghosh, MD and CEO of Bandhan Bank and its founder, decided to step down from the position once his term ended on July 9, 2024. In a letter to the board recalling how Bandhan was started to where it currently is, Ghosh said, “After leading the Bank for almost a decade including three consecutive tenure as MD and CEO, I feel that the time has now come for me to assume a larger strategic role at Bandhan group level. Hence, I have decided to retire from the services of Bandhan Bank at the end of my current tenure as MD and CEO, i.e. on July 09, 2024“.

Interestingly, Ghosh’s resignation from the bank comes at a time when the forensic audit by the National Credit Guarantee Trustee Company (NCGTC) is underway. It is anticipated that the final report of the audit should be due out soon. On February 12, businessline reported that forensic audit by NCGTC is being conducted at the bank examining loans worth $23,300 crore.

Outsider CEO likely

According to sources aware of the matter, Bandhan Bank may see an external candidate replace Ghosh as MD and CEO. “Although there have been a lot of fresh hands joining the bank at very senior levels in the recent months, the bank is still believed to be searching for a CEO candidate,” said a person familiar with the matter.

This is despite the bank having at least five new senior leadership executives taking charge recently.

Troubled phase

Asset quality woes for Bandhan Bank began during the pandemic with gross non-performing asset ratio shooting from 1.48 per cent in FY20 to 6.81 per cent in FY21. It shot to 7.02 per cent in December FY24 quarter. Meanwhile, ₹23,300 crore loans, comprising of ₹20,800 crore of loans covered under Credit Guarantee Fund for Micro Units (CGMFU) and ₹2,500 crore of loans covered ECLGS or Emergency Credit Line Guarantee Scheme are being audited for several lapses including evergreening of loans and assessing for potential inflation in the portfolio by way of fictitious customers. This is roughly 18 per cent of the bank’s total loan book as on Q3 FY24.