Chandra Shekhar Ghosh hangs up boots as Bandhan Bank MD and CEO

Chandra Shekhar Ghosh on Tuesday ended his nearly nine-year tenure as the managing director and chief executive officer (MD & CEO) of Bandhan Bank.

In April, the Kolkata-based lender’s founder announced he would step down to take a broader strategic role at Bandhan Financial Holdings, the bank’s holding company.

Ghosh’s abrupt departure surprised many, given the bank’s board had in November last year approved extending his tenure until 2027, subject to the banking regulator’s approval.

Though no succession plan was in place, the bank has appointed Ratan Kumar Kesh interim MD & CEO for three months starting July 10. A leadership advisory firm has been appointed to search Ghosh’s successor.

In 2001, Ghosh founded Bandhan as a not-for-profit entity to provide small loans to the underprivileged and help them in their entrepreneurial journey. It became a non-banking finance company in 2006 and India’s first microfinance institution to transform into a universal bank in August 2015.

Ghosh’s tenure as the MD & CEO has not been without its share of challenges, such as the IL&FS meltdown in 2018, a devastating cyclone in 2019, and the microfinance crisis in Assam in 2020. Later it was the Covid-19 pandemic that severely dented the bank’s asset quality and increased its non-performing assets.

However, Bandhan Bank under Ghosh acquired Gruh Finance from the erstwhile HDFC in an all-stock deal, a move that reduced the lender’s share of unsecured microfinance loans.

Ghosh’s exit presents new challenges for the bank, including finding a credible replacement and managing investor reactions. Bandhan Bank’s market capitalisation has declined by 47 per cent in the past three years.