External candidate may replace Ghosh as MD and CEO of Bandhan Bank
Ghosh’s resignation comes at a time when a forensic audit is being conducted by NCGTC
After serving Bandhan Bank for almost nine years, Chandra Shekhar Ghosh, MD and CEO of Bandhan Bank and its founder, has decided to step down from the position once his term ends 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 tenures 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
Chandra Shekhar Ghosh, MD and CEO of Bandhan Bank
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 audit report would be out soon. On February 12, businessline reported that a forensic audit by NCGTC is being conducted at the bank examining loans worth ₹23,300 crore.
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 the gross nonperforming 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 the December FY24 quarter.
Meanwhile, ₹23,300 crore of loans, comprising ₹20,800 crore of loans covered under the Credit Guarantee Fund for Micro Units (CGMFU) and ₹2,500 crore of loans covered by 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 of Q3 FY24.