Bandhan Bank's Strategic Shift: From Microfinance to Secured Lending

Bandhan Bank is undergoing a strategic realignment over the next two-three years, aiming to reduce reliance on unsecured microfinance loans and increase secured loans. This shift intends to lower the EEB loan share and is also expected to slightly reduce the bank's net interest margin.

Bandhan Bank is set to rebalance its business strategy over a two-to-three year period, shifting focus from unsecured microfinance loans towards a more secure loan portfolio, according to the bank's top executives.

The bank's objective is to decrease the proportion of loans from the Emerging Entrepreneurs Business (EEB) segment from 42% to 35% of its total loans. Simultaneously, it plans to boost the share of secured loans which currently stand at 42%.

This strategic realignment is anticipated to marginally decrease the bank's net interest margin by around 50 basis points, bringing it down to 6.1-6.2% from the 6.7% recorded in the March quarter.

(With inputs from agencies.)