In an interview with Mithun Dasgupta, Ghosh says the bank's gross NPA ratio is not likely to rise further.
Chandra Shekhar Ghosh (File image)
Bandhan Bank expects there would be challenges in the next two-three months in Assam after the lender witnessed a very sharp dip in the collection efficiency in January, says managing director and CEO Chandra Shekhar Ghosh. In an interview with Mithun Dasgupta, Ghosh says the bank’s gross NPA ratio is not likely to rise further. Excerpts:
In Assam, Bandhan Bank’s collection efficiency in the micro credit segment had stood at 88% at the end of December. But it fell to 78% during the first 16 days of January following the state govt passing the Assam Micro Finance Institutions (Regulation of Money Lending) Bill, 2020, and talks of a possible waiver of micro loans by political parties ahead of the Assembly elections later this year. What is your exposure in the state and what is the outlook on the asset quality going ahead?
In Assam, the collection efficiency came down in the first 16 days of January. Now, it is stabilising a little bit. It shows that borrowers are willing to repay. We think there will be challenges in the next two-three months.
Total microcredit group loan in the state is around Rs 6,917 crore, which is around 8% of the bank’s total advances. The repayment rate for businessmen, who had taken loans during this pandemic, is higher in the state. We are now very conservative with regard to fresh lending.
During the third quarter, the bank’s total advances grew 22.6% year-on-year. What kind of credit growth you are expecting in the fourth quarter?
In the last quarter, the credit growth generally remains higher. Credit growth will not be less in the fourth quarter compared to the third quarter. We hope similar credit growth in the March quarter as well as credit demand is returning.
The number of new customers coming to take loans was higher in the December quarter of FY21 compared with the year-ago period, especially in the micro-banking segment and partly in MSMEs.
What about the home loan demand?
The demand for home loans also improved compared to the September quarter.
The gross NPA ratio during the third quarter stood at 1.11%. What is the outlook on the asset quality going forward?