Bandhan Bank MD Ghosh asks staff not to worry over his resignation

This report has been updated to include additional information
Bandhan Bank's managing director (MD) and chief executive officer (CEO) Chandra Shekhar Ghosh, who has decided to step down, on Wednesday said the bank will need at least three months to identify his successor.

He has also written to his employees, asking them “not to worry” over his surprise decision.

“Whatever, our experience in the earlier selections, when we selected two executive directors on the basis of that experience we need a minimum three months of time for selection of candidates and then it will go to RBI and then whatever is the time taken by RBI for approval,” Ghosh said.

When asked if there will be an interim CEO, he said the board will take necessary steps in the first week of July. Ghosh also clarified that there has been no communication from the regulator on the issue and the decision to step down was “voluntary”.

To the staff, he said such leadership transitions are normal events.

“In the life of any organisation, such transitions are normal events. There is no need for worry or apprehension. Indeed, it would be a great reward for me if you work harder and collectively, take Bandhan Bank to further heights of excellence,” Ghosh said in a communication to the exchanges.

The copy of the letter has been reviewed by Business Standard.

Last week, the bank informed the exchanges that Ghosh will retire after his current term ends on 9 July, 2024. The decision comes even after the Bandhan board approved his extension for three years for November last year.

Sources said the new CEO could come from outside. The bank has two executive directors – Rajinder Kumar Babbar and Ratan Kumar Kesh -- but both are relatively new in the bank. Babbar received approval from RBI in January 2024 while Ratan Kumar Kesh received RBI approval in March 2023.

The bank had also appointed Rajeev Mantri as the new CFO in February 2024.

In the letter, Ghosh said he will ensure transition according to the succession framework of the bank.

“I continue to remain your MD & CEO till July 9, 2024 after ensuring transition as per the bank’s succession framework. Even after that, being in the strategic Bandhan Group level, I will always be available for any advice, whenever required by the Bank,” he said.

Analysts have turned cautious following Ghosh's decision to step down.

“We remain watchful of the management transition and the bank’s execution capability as it focuses on continued diversification of loan book while improvement in asset quality is expected to drive earnings,” broking firm Motial Oswal said in a report.

On the issue of the timing of the retirement decision, Ghosh said it was a personal decision which his wife was also not aware of.

"My wife also asked the same question. She said we are living together, you have not shared about your retirement plan with me, and how suddenly you go to the office and I hear about it and I receive many calls which I'm not in a position to answer the people. I did not like to share. It is a very personal decision, voluntary decision and accordingly, I planned, I nurtured for more than one year," he said.

Bandhan Bank, which started its operations in 2015, was the first microfinance institution to become a universal bank. In 2022, it crossed the milestone of Rs 2 trillion of total business. As of 31 December 2024, the loan book of the bank was Rs 1.29 trillion and deposits were Rs 1.35 trillion.