RBI names former central banker on Bandhan Bank board to aid succession

  • The banking regulator has appointed retired chief general manager Arun Kumar Singh as an additional director on the board of Bandhan Bank
  • Bandhan Bank’s founder and CEO Chandra Shekhar Ghosh is to retire on 9 July

Shayan Ghosh
First Published25 Jun 2024, 10:01 AM IST
In April, Chandra Shekhar Ghosh announced he would step down as managing director and chief executive of Bandhan Bank when his term ends on 9 July. (Reuters)
In April, Chandra Shekhar Ghosh announced he would step down as managing director and chief executive of Bandhan Bank when his term ends on 9 July. (Reuters)

The Reserve Bank of India has appointed a former central banker to the board of Bandhan Bank, about two weeks ahead of founder and chief executive Chandra Shekhar Ghosh’s retirement.

While the bank late on Monday announced RBI’s decision to appoint retired chief general manager Arun Kumar Singh as an additional director on its board, it did not specify the rationale behind the step. 

A person familiar with the development said RBI’s move was likely to ensure a smooth transition at Bandhan Bank considering its succession process is still ongoing. Also, Singh would support oversight of the bank’s board of directors.

“The regulator does not have any broader concern with the bank and the additional director was put in to aid succession,” said this person, speaking on condition of anonymity.

Mint had reported in December that big-four accounting firm EY was conducting a forensic audit on a portion of Bandhan Bank’s loan book that’s backed by government guarantees. The bank’s management has clarified that the audit had no link to Ghosh’s decision to retire.

RBI and Bandhan Bank did not immediately reply to Mint’s queries.

No successor yet

Analysts believe RBI’s decision to appoint Singh is to ensure proper functioning of Bandhan Bank.

“The issue in the case of Bandhan (Bank), in our view, is that there aren’t sufficient internal candidates in the bank who have served the bank for a long time at board level to be eligible for the CEO position,” Suresh Ganapathy, managing director and head of financial services research at Macquarie Capital, said in a note to clients on Tuesday. 

“While the market may fear that there could be more skeletons in the closet (in terms of further increase in the stress pool), we believe this is more of a prudent measure exercised by the RBI.”

Also read | Bandhan Bank’s asset quality issues, high credit cost keep investors on edge

RBI has appointed 60-year-old Singh for a period of one year, till 23 June 2025, or till further orders, whichever is earlier. A graduate in economics and an MBA in finance and human resources, Singh is also a Certified Associate of the India Institute of Banking (CAIIB) and worked at RBI for about 36 years. 

He has served as an RBI nominee director on the boards of five banking and non-banking entities, as per Bandhan Bank’s stock exchange filing.

“(Singh) has worked in various capacities in the field of non-banking supervision, regulation, banking supervision and regulation, financial inclusion, monetary policy, information technology, enforcement actions against banks and non-banks, government banking, etc,” Bandhan Bank said in its filing. 

Ghosh’s exit

Bandhan Bank’s board in November approved Ghosh’s reappointment for three more years, and was awaiting RBI’s clearance.

In April, Ghosh announced he would step down as managing director and chief executive when his term ends on 9 July. In his resignation letter, Ghosh said he was looking to assume a broader strategic role after stepping down, but did not specify what that would be.

Also read | Bandhan Bank's Ghosh not to be part of the board post-retirement

“I am neither an economist nor a banker. I am a pure NGO worker," said Ghosh, who has helmed the bank since its inception in 2015. “I feel happy to leave behind a strong franchise in the hands of a capable leadership team, many of whom have partnered me in building the organisation, brick by brick, sharing the same vision and values.”

Speaking to analysts and investors a few days later, Ghosh had clarified that the bank’s board would start the process of finding his successor and expected the names of candidates to be finalised by July. 

“The bank is ready to take the next leap of growth with capable leadership. I can assure you on behalf of the board that it will be a smooth transition," he had said. “By July first week, the board will decide whether there is a need for an interim CEO.” 

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.MoreLess
First Published:25 Jun 2024, 10:01 AM IST
HomeCompaniesRBI names former central banker on Bandhan Bank board to aid succession

Most Active Stocks

Tata Steel

166.70
02:12 PM | 15 JUL 2024
-2 (-1.19%)

NTPC

387.70
02:12 PM | 15 JUL 2024
10.45 (2.77%)

Bharat Electronics

331.95
02:12 PM | 15 JUL 2024
-1.35 (-0.41%)

Oil & Natural Gas Corporation

320.85
02:12 PM | 15 JUL 2024
13.9 (4.53%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

HBL Power Systems

626.30
02:08 PM | 15 JUL 2024
54.1 (9.45%)

Tanla Platforms

1,033.75
02:08 PM | 15 JUL 2024
81.15 (8.52%)

M M T C

96.01
02:08 PM | 15 JUL 2024
7.4 (8.35%)

Macrotech Developers

1,498.10
02:07 PM | 15 JUL 2024
102.65 (7.36%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    74,771.00290.00
    Chennai
    73,827.00-145.00
    Delhi
    73,972.00-799.00
    Kolkata
    74,045.0073.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.86/L0.00
    Chennai
    100.75/L-0.01
    Kolkata
    104.95/L0.00
    New Delhi
    94.72/L0.00
    OPEN IN APP
    HomeMarketsCibilPremiumMint Shorts