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Business News/ Industry / Banking/  NPA borrowers paying  back dues: Bandhan Bank CEO
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NPA borrowers paying  back dues: Bandhan Bank CEO

Chandra Shekhar Ghosh said the third wave has not materially altered the income stream of Bandhan’s borrowers, and 66% of borrowers whose loans had turned non-performing are repaying some portion of their past dues, in a sign of improvement on the ground

Bandhan Bank CEO Chandra Shekhar Ghosh said advances grew 10% y-o-y, and deposits by 19%, bringing Bandhan back to the pre-pandemic positionPremium
Bandhan Bank CEO Chandra Shekhar Ghosh said advances grew 10% y-o-y, and deposits by 19%, bringing Bandhan back to the pre-pandemic position

MUMBAI : Bandhan Bank is witnessing an improvement in customer repayment behaviour, with a majority of even those whose loans have been recast restarting payments, chief executive Chandra Shekhar Ghosh said. According to Ghosh, the third wave has not materially altered the income stream of Bandhan’s borrowers, and 66% of borrowers whose loans had turned non-performing are repaying some portion of their past dues, in a sign of improvement on the ground. Edited excerpts:

Has the third wave affected borrowers?

The third wave has not impacted borrowers on the ground. The new wave began somewhere in the first week of January, and by the second week, the number of new cases declined. Another thing is that the third wave has not touched the rural and semi-urban areas, and people feel that since they have already overcome the challenges of the first two waves, they can now run businesses. Borrowers are telling the bank there is no need to delay sending collection executives as they are willing to repay dues. So we are seeing that the third wave has not impacted businesses and our collections. Collection efficiency has actually improved from December to January. Unlike earlier, there are no lockdowns and, therefore, borrowers are not facing movement restrictions. Thus, their businesses are not being impacted by the third wave.

Are contingent provisions needed?

I do not see the need for further contingent provisions for covid after having taken it in the previous quarter. However, instead of rolling it back immediately, maintaining those provisions would strengthen the institution, and it could be used at a later stage.

How are the stressed pool and emergency credit line guarantee scheme loans performing?

About 66% of our non-performing asset (NPA) customers are repaying, and 61% of customers whose loans were restructured are also repaying. We had given a moratorium to people whose loans were restructured, but we are seeing that many of them are voluntarily repaying, and it shows that borrowers are back on the repayment track. Once a customer becomes NPA, they remain in this category till their total accrued payments are cleared. While they have started repaying, they have not been able to pay the total dues yet. It will take some time to regularize their dues fully. Emergency credit line guarantee scheme loans are performing good and their performance is aligned to other customer segments. Outstanding ECLGS loans have, however, come down as people have started repaying.

What is your outlook on business growth?

Advances grew 10% year-on-year, and deposits have grown 19% y-o-y, bringing the bank back to the pre-pandemic position. The quarter saw significantly high business growth, and even in the March quarter, we are expecting good growth. At the field level, we see good responses from borrowers as consumer demand improves, leading to an improvement in business. Considering the good monsoon, we see healthy demand on the ground. The bank is receiving customer loan queries too, and all these parameters point to good business growth.

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ABOUT THE AUTHOR
Shayan Ghosh
Shayan Ghosh is a national editor at Mint reporting on traditional banks and shadow banks. He has over 12 years of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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Published: 26 Jan 2022, 12:34 AM IST
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