Bandhan Bank to increase exposure to secured loans

Private lender Bandhan Bank will gradually increase its exposure to secured loans by enhancing advances to the housing and MSME sectors, its Managing Director and CEO Chandra Shekhar Ghosh said. Ghosh told PTI that the lender will increase its exposure to secured loans and has set a target to increase disbursements to housing and medium-size MSME loans.


PTI | Kolkata | Updated: 22-05-2022 16:43 IST | Created: 22-05-2022 16:41 IST
Bandhan Bank to increase exposure to secured loans
Representative Image Image Credit: ANI
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Private lender Bandhan Bank will gradually increase its exposure to secured loans by enhancing advances to the housing and MSME sectors, its Managing Director and CEO Chandra Shekhar Ghosh said. Presently, the bank's exposure to MFI loans, which are unsecured, is 47 percent, and the share of its advances to the housing segment is at 24 percent, retail at two percent, and micro, small and medium enterprises sector at 27 percent, he said. Ghosh told PTI that ''the lender will increase its exposure to secured loans and has set a target to increase disbursements to housing and medium-size MSME loans. Advances to MFIs and small-ticket MSME loans are unsecured''.

He said that 25 percent of its MFI loans will be converted to formal MSME advances as the interest rates in the segment are similar to micro-credit or the loans given to self-help groups (SHGs).

There will be ''no impact on the profitability'' of the bank as there is no difference in the interest rates, he said.

In the last quarter of the previous fiscal, the bank clocked a net profit of Rs 1,902 crore and there had been no provisioning for bad loans, he said.

By 2025, the bank will convert ''26 percent of group loans to joint liability group (JLG) advances, which are micro-credit given to batch of small borrowers''.

Responding to a query on the expansion of branches in the current fiscal, Ghosh said around 530 banking outlets will be opened across the country, taking the total number to more than 6,000.

Recently, the private lender's holding company Bandhan Financial Holdings Ltd diluted 21 percent of its stake in the banking entity to raise Rs 10,600 crore, out of which Rs 4,500 crore had been utilized to acquire a majority shareholding in IDFC Mutual Fund.

Presently, the shareholding of the holding company has decreased to 40 percent, which is in ''conformity'' with the regulatory norms, Ghosh said.

Earlier, Bandhan Financial Holdings' stake was 82 percent at the time of the listing of the bank on the stock exchanges, which subsequently decreased to 61 percent with the acquisition of Gruh Finance.

Ghosh said there is no need for a follow-on public offer as the bank is adequately capitalized.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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