Chandra Shekhar Ghosh may step down from Bandhan Bank board

Chandra Shekhar Ghosh

Chandra Shekhar Ghosh, founder and promoter of Bandhan Bank who is stepping down from the position of MD & CEO of the bank in a few days from now, may cease to be a director of the bank as well, according to highly placed people aware of the matter.

An email sent to the bank remained unanswered when this story was published. It will be updated as and when the bank responds.

On April 5, Ghosh announced that he would step down as MD & CEO of the bank on July 9. Earlier on July 6 Bandhan Bank announced that Ratan Kumar Kesh will take over as interim CEO and MD of the bank on July 10. Kesh serves as the Chief Operating Officer (COO) and executive director at Bandhan Bank.

In an interview with CNBC-TV18 on May 21, 2024, Ghosh said he needs to play a bigger, more strategic role in the holding company.

Ghosh’s decision to end all ties with the bank in any formal capacity may have been triggered following the intervention of two large shareholders of Bandhan Bank’s ultimate holding company - Bandhan Financial Services Limited. These shareholders are the International Finance Corporate which owns 13.59 percent, and Singapore’s GIC, which through its investment arm - Caladium Investment Pte Limited holds a 16.7 percent stake in Bandhan Financial Services. Caladium Investment also directly holds around 7.8 percent stake in Bandhan Bank.

According to the people cited, the two early investors in Bandhan group – IFC and GIC - are said to have expressed their reservations about investing in the bank if Ghosh continues his formal association with it. Given that a forensic audit is underway at the bank, there may be a requirement to deploy capital in the bank if the audit throws up adverse observations.

“If the findings are not favourable, there is a possibility that the audit triggers a capital raise at the bank. In this case, some of the existing investors including GIC and IFC may not want Ghosh to be associated with the bank, in case they should pump in capital. Ghosh’s exit from the board is therefore very critical,” said a highly placed source aware of the matter.

An email sent to GIC seeking comments on the matter remained unanswered, while IFC declined to offer comments.

Bandhan Bank’s microfinance loans worth Rs 22,000 crore are under forensic audit by National Credit Guarantee Trustee Company (NCGCT) for various counts including charges of ever-greening of loans and allegations of some borrowers being fictitious.