NCGTC audit on Bandhan Bank's books should get over soon, says CEO Ghosh

The NCGTC has flagged that the loans were either evergreen or that Bandhan Bank created fictitious accounts to obtain the maximum guarantee cover.

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26 Aug, 2025 12:21

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Private-sector lender Bandhan Bank is expecting the National Credit Guarantee Trust Company (NCGTC) audit of its claims under the Credit Guarantee Fund for Micro Units (CGFMU) and Emergency Credit Line Guarantee Scheme (ECLGS) to be completed soon, said Chandra Shekhar Ghosh, the bank's managing director and chief executive officer (MD and CEO).

“We expect the CGFMU audit to be completed soon. As per the communication, we are expecting a positive response,” Ghosh said at the post-results analyst call on May 17.

This comes after Bandhan Bank had taken insurance of the portfolio of Rs 20,800 crore under the CGFMU scheme and disbursed over Rs 1,950 crore under the ECLGS in FY 2020-21. The NCGTC has flagged that the loans were either evergreen or that Bandhan Bank created fictitious accounts to obtain the maximum guarantee cover.

ALSO READ: Bandhan Bank Q4 net profit slides to Rs 55 cr on high loan write-offs, asset quality healthy

Evergreening is the practice of extending new or additional loans to a borrower unable to repay existing loans, thereby concealing the true status of an NPA or bad loan.

What The Credit Guarantee Scheme Says

The maximum eligible amount a bank can claim under the CGFMU insurance is 15 percent of the total insured amount. So far, the Bank has claimed and received an amount of Rs 917 crore from the NCGTC in December 2022. Post this, the bank made an additional claim of Rs 1,296 crore during the Q2FY24.

Also read: MC Explains | Bandhan Bank's loans worth Rs 23,300 crore are being probed. Here's why

The bank had earlier clarified that the total claimed amount so far is much lower than the maximum eligible amount. "It may also be noted that nearly 85 percent of the funds disbursed have been repaid by customers," the bank said earlier.

With respect to the residual non-performing portfolio, the bank had made a provision of around 88 percent. Furthermore, the recovery process from these accounts is underway and the bank has already recovered more than 20 percent of the claimed and received amount of Rs 917 crore from underlying customers.

NCGTC had conducted an initial sample audit through an independent agency after the second claim. "The NCGTC has made certain observations based on the sample audit and the Bank has provided clarifications for the same. Subsequently, NCGTC decided to commission a detailed audit of the claims," the bank said on February 13.