Housing finance: Key focus for Bandhan Bank

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Having stabilized the delivery after some reverses on its flagship microloans because of demonetization and the humbling experience with large corporate exposures, Bandhan Bank now wants to focus on the home loan phase. The housing finance book is centered to grow 5 times to Rs 1 lakh crore within the subsequent 5 years from the present stage of almost Rs 20,000 crore.

Mr. Chndra Shekhar Ghosh, who has been heading Bandhan since its days as a microlender, stated it is good that the failure on the big exposures happened very early into Bandhan Bank’s journey, which helped restrict the losses, and affirmed that it will never lend to the large phase again. 

On the promoter share front, where the RBI had put restrictions along with on network enlargement and capping Ghosh’s salary before absolutely withdrawing both, he said the setback helped the bank determine on “compliance” as the priority. He said housing finance might be a Rs 1 lakh crore book and occupy almost a third of the Rs 3.5 lakh crore lending book that the bank has targeted.   

Ghosh said the business has had cycles of good growth, which gets observed with some effect due to modifications in the overall environment beyond the bank’s control and particularly cited demonetisation and the current COVID-19 pandemic which led to a complete wipeout in collections. He defended the over-reliance at the eastern geography, which accounts for over 75 per cent of the general business at present, and introduced that at the same time as the business grows elsewhere, Bandhan will keep growing in the east.  

When asked about setbacks like repayments effect due to the anti-CAA protests over the past 12 months, Ghosh said till date, not a single rupee of loan has been written off in Assam and the reverses it faced due to the protests are a part of the business. 

With West Bengal heading to elections, he expressed a self-belief that there will not be a flip to populism which may also lead anybody to not pay on their loans ahead of the crucial assembly polls. He stated small borrowers prefer paying because they understand the significance of dedication to paying off and do not mind sharing the advantages of developing business with the financier who helped make it feasible.  

After turning into a bank, its charge of lending has decreased to 17.95 per cent from 22.4 per cent earlier and will reduce further as the share of the low-cost deposits will grow, Ghosh stated, admitting that in the beginning, getting people to deposit was a task because the complete system has been tuned as a model specializing in lending and not liabilities. Ghosh stated more than the charge of interest, a borrower is more concerned with the delivery of simple and well-timed credit for all. 

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