RBI appoints additional director on Bandhan Bank’s board

The Reserve Bank of India has appointed a director on the board of private sector lender Bandhan Bank, which will soon see a top management transition.

The Kolkata-based lender’s MD and CEO Chandra Shekhar Ghosh will retire on July 9, after spending nearly a decade at the helm.

In a stock exchange filing, Bandhan Bank said the Reserve Bank of India has appointed Arun Kumar Singh, a retired chief general manager at the central bank, as an Additional Director on its board for a period of one year from June 24, 2024 to June 23, 2025. Singh, aged 60 years, has working experience of almost 36 years in RBI.

According to sources familiar with the development, the RBI has appointed the additional director on the bank’s board to assist a “smooth” management transition as its MD and CEO’s term is coming to an end shortly and the successor selection process is still on.

On the succession plan, Ghosh, during an earnings call with analysts and investors last month, had said, “A search committee has been formed and it has appointed headhunters.”

Q4 results

Suresh Ganapathy at Macquarie Capital, in a note on Tuesday, said the RBI’s move “is more of a prudent measure”.

Bandhan Bank reported a 93.24 per cent year-on-year fall in its net profit to ₹54.62 crore for the fourth quarter last fiscal as the bank’s total provision soared by over two-fold due to total technical write off of ₹3,852 crore of bad loans, mostly microfinance, during the quarter.

The bank said the technical write off was a “prudent and conservative” move to “strengthening” its asset quality. The lender further said it was a “very old portfolio” during the Covid times.