‘We now have 3 years to reduce stake to 20%’

CHANDRA SHEKHAR GHOSH MD & Ceo, bandhan Bank

Bandhan Financial Holdings, the holding company of Bandhan Bank, has diluted its stake by 20.95 per cent to comply with the Reserve Bank of India’s (RBI’S) licensing guidelines. CHANDRA SHEKHAR GHOSH, managing director and chief executive officer of the firm, tells Ishita Ayan Dutt that entering the insurance and mutual fund businesses is an option, but the board will take a call on this. Edited excerpts:

Bandhan has diluted its excess shareholding through secondary market sale. Who are the buyers?

There were multiple buyers, but among them were GIC Pte, Blackrock, Temasek, and SBI Mutual Fund.

Bandhan has raised about ~10,500 crore. How will this be utilised?

This money will go to the holding company, Bandhan Financial Holdings. One of the options before the NOFHC (non-operative financial holding company) is entering the insurance and mutual fund businesses. The board will take a call.

What is the timeframe for bringing promoter holding to 20 per cent?

The first dilution had to be done in three years. We now have three years in hand to reduce stake to 20 per cent.

Now that compliance is taken care of, what does this mean for Bandhan’s expansion?

A couple of months back, RBI withdrew the restriction on expansion and, accordingly, we are planning for the next five years on the bank’s expansion. However, there are hindrances because of the Covid-19 situation. Gradually, we are going to expand branches to attract retail deposits.

Are you seeing an improvement in collections?

Collection efficiency is very good. When the lockdown was relaxed in June, borrowers started repaying. But localised lockdowns are a challenge. Apart from that, collection has reached almost 85 per cent of normal. Overall, collection efficiency has improved since June.

To what extent have floods in Bihar and Assam impacted recovery?

We have floods in Bihar and Assam, and West Bengal had a cyclone. Every year, there is a flood or cyclone. Last year, we faced Cyclone Fani in Odisha. We stopped the collection voluntarily this time, learning from our previous experience. We were only in touch with customers to ensure their safety, which helped us build a good relationship. Once they get over the current situation, they will automatically come forward to repay.