Chandra Shekhar Ghosh May Steps Down Amidst Investor Pressure: Bandhan Bank’s Future Uncertain

Chandra Shekhar Ghosh, founder and CEO of Bandhan Bank, is set to step down amidst investor scrutiny, potentially reshaping the bank's leadership and strategy.

In a significant development for Bandhan Bank, founder Chandra Shekhar Ghosh announced his impending departure as Managing Director and CEO, effective July 9. This decision comes amidst mounting pressure from major shareholders, including the International Finance Corporation (IFC) and Singapore’s GIC, who have expressed concerns over Ghosh’s continued association with the bank amid ongoing challenges.

The transition plan, unveiled recently by the bank, appoints Ratan Kumar Kesh as the interim CEO and MD starting July 10. Kesh, currently serving as the Chief Operating Officer and executive director at Bandhan Bank, steps into this role at a critical juncture for the institution.

The catalyst behind Ghosh’s departure appears linked to a forensic audit initiated on Bandhan Bank’s microfinance loans, valued at Rs 22,000 crore, by the National Credit Guarantee Trustee Company (NCGCT). Allegations including loan evergreening and concerns over the authenticity of borrowers have spurred this audit, casting a shadow over the bank’s financial health and operational practices.

Sources familiar with the matter suggest that IFC and GIC, holding substantial stakes in Bandhan Financial Services Limited, the bank’s parent company, have voiced reservations about Ghosh’s tenure amidst the ongoing audit. These shareholders are pivotal in the decision-making process, given their significant investment in both the financial services group and directly in Bandhan Bank.

“If adverse findings emerge from the ongoing forensic audit, there is a likelihood of capital infusion requirements,” noted a source close to the developments. “In such a scenario, the stance of major investors like GIC and IFC towards Ghosh’s association with the bank becomes crucial.”

The potential capital raise, if necessitated by audit outcomes, underscores the delicate financial balancing act facing Bandhan Bank. With shareholder confidence pivotal in such decisions, the departure of Ghosh from the board could signal a strategic realignment aimed at appeasing investor concerns and ensuring stability in turbulent times.

Efforts to reach IFC and GIC for comments on their stance regarding Ghosh’s role remained unanswered, reflecting the sensitivity and complexity surrounding these deliberations.

Ghosh, a pioneering figure in India’s microfinance sector, founded Bandhan Bank with a vision to empower underserved communities through financial inclusion. His departure marks a turning point for the institution he nurtured from its inception, with implications that extend beyond leadership changes to potentially reshape the bank’s operational and governance framework.

As Bandhan Bank navigates these challenging waters, the appointment of Ratan Kumar Kesh as interim CEO and MD signals continuity in leadership, albeit amidst heightened scrutiny and uncertainty. The road ahead promises to be a defining chapter in the bank’s journey, as it seeks to address investor concerns, navigate regulatory audits, and reaffirm its commitment to transparency and sustainable growth.

In conclusion, Ghosh’s imminent exit underscores broader challenges within Bandhan Bank, reflecting a pivotal moment in its corporate trajectory. As stakeholders await further developments, the focus remains on how the institution will chart its course in the evolving landscape of India’s banking sector.

News Bureau
News Bureau
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