With 20% stake dilution, compliance taken care of: MD & CEO, Bandhan Bank

The first dilution had to be done in three years. We now have five years in hand to reduce to 20 per cent, the MD and CEO tells Business Standard

Bandhan Financial Holdings, the holding company of Bandhan Bank, has diluted a 20.95 per cent holding to be fully compliant with the Reserve Bank of India's Licensing Guidelines. Chandra Shekhar Ghosh, MD & CEO, Bandhan Bank, tells Ishita Ayan Dutt that the board of Bandhan Financial Holdings will take a call but insurance and mutual fund was one of the options. Edited excerpts:

Q. Bandhan Financial Holdings has diluted its excess shareholding of 20.95 per cent through secondary market sale. Who are the buyers?
 

A. There were multiple buyers but among them were GIC Pte, Blackrock, Temasek, SBI Mutual Fund.

Q. Bandhan Financial Holdings has raised about Rs 10,500 crore. How will it be utilised?
 

A. This money will go to the holding company which is Bandhan Financial Holdings Limited. One of the options before the NOFHC (Non-Operative Financial Holding Company) is insurance and mutual fund. The board will take a call.

Q. After the stake sale, promoter holding has come down to 40 per cent. What is the timeframe to bring it down to 20 per cent?
 

A. The first dilution had to be done in three years. We now have five years in hand to reduce to 20 per cent.

Q. The compliance issue is now taken care of, so what would it mean for Bandhan's expansion?
 

A. A couple of months back, the restriction on expansion was withdrawn by the Reserve Bank of India and accordingly we are making a plan for the next five years on bank's expansion. But because of Covid situation, there were hindrances. Gradually, we are going to do expansion of branch banking more to attract retail deposits.

Q. Are you seeing an improvement in collections?
 

A. The collection efficiency is very good. When the lockdown was relaxed in June, very good performance has been shown by my borrowers. But localised lockdown is a challenge. Other than that collection has reached almost 85 per cent normalisation. Overall collection efficiency has improved from since the beginning of June.

Q. To what extent are floods in Bihar and Assam impacting recovery?
 

A. We have floods in Bihar and Assam and West Bengal had a cyclone. Every year, there is a flood or cyclone. Last year, we faced Phani in Odisha. From our past experience at the ground level, we stopped the collection voluntarily this time. We were only in touch with the customer to ensure safety which helped us in building a good relationship. Once they get over the current situation, they will automatically come forward to repay.