Bandhan Bank is undergoing a significant transformation as it prepares for life without its founder, Chandra Shekhar Ghosh, who is set to retire on July 9. With a strategy in place to increase the share of unsecured loans, the bank is ushering in Bandhan 2.0 under new leadership composed of professionals from Axis, HDFC Bank, and Citi.

Currently, Bandhan Bank’s loan portfolio comprises 57.4% unsecured loans and 42.6% secured loans. The goal is to achieve a 50:50 ratio by FY26. Rajeev Mantri, the bank’s CFO, states that the bank will continue to grow at a rate of 18%. Mantri, who has over 25 years of experience in banking and finance, was previously the CFO for Citi India.

The bank’s traditional microfinance segment is expected to grow at a slightly lower rate of 14-15%, necessitating faster growth in other secured segments such as housing, auto, two-wheeler, commercial vehicle, and gold loans to meet the overall growth target.

To diversify its portfolio, Bandhan Bank is expanding into commercial banking (SME), corporate banking, housing finance (including affordable housing), and various loan products. It also aims to attract affluent customers with priority cards, lounge access, and salary accounts. In the corporate sector, it targets transactional banking to generate fee income.

Bandhan Bank has revamped its credit underwriting processes, introducing a 90-day cooling-off period for accounts that become non-performing assets (NPAs) before issuing new loans. It has established a data analytics team and a separate recovery team to focus on SMA (Special Mention Account) borrowers to prevent further delinquency and recover existing slippages. This strategy is designed to optimize risk management while driving customer-centric growth.

“This approach leverages data science, analytics, and a deep understanding of customer behavior to drive growth-oriented decision-making,” says Rajinder Kumar Babbar, Executive Director & Chief Business Officer, who has over three decades of banking experience, including 23 years at HDFC Bank.

In March 2023, Ghosh appointed Ratan Kumar Kesh as Executive Director & Chief Operating Officer to expedite the transformation. Kesh, with nearly three decades of experience from ICICI Bank, HDFC Bank, Yes Bank, and Axis Bank, has helped shift the core banking solution (CBS) from FIS to Oracle to better meet regulatory changes and customer needs.

By completing this transformation in October, Bandhan Bank has resolved nearly 90% of its pending regulatory issues. In March, Ghosh selected Babbar to lead the bank towards sustained growth and success, emphasizing customer satisfaction, regulatory compliance, and operational efficiency. “My key responsibilities include enhancing business opportunities, driving innovation and digital transformation, fostering revenue growth, and managing risk,” says Babbar.