Bandhan Bank: NCGTC Audit Completed, Payout Considers Exclusion Of Adjusted Accounts

Bandhan Bank Ltd. said on Thursday that it will receive a payout of Rs 314.68 crore from the National Credit Guarantee Trustee Co. following the completion of a forensic audit. The revised amount considers exclusion of certain accounts which have been adjusted from the claim, the bank said.

This was based on a conservative approach taken by the bank, in view of certain operational gaps due to limitations imposed by Covid-19 restrictions during fiscal 2020-21.

Bandhan Bank’s statement came after NDTV Profit in February had reported that NCGTC initiated a forensic audit of loans worth Rs 23,300 crore due to concerns about the lender's credit guarantee portfolios. The audit began in December 2023, following a preliminary audit conducted by NCGTC, which raised several observations.

The total claim payout under the scheme was assessed at Rs 1,231.29 crore as of March. The bank had initially claimed Rs 916.61 crore from NCGTC, which was settled. It made an additional claim of Rs 1,296.32 crore in the second quarter of the financial year-ended March 2024. The amount was within the maximum eligibility of 15% of the total insured loans, according to a statement to the exchanges.

Bandhan Bank had obtained guarantees under the Credit Guarantee Fund for Micro Units scheme and Emergency Credit Line Guarantee Scheme, set up by the Indian government to guarantee payments against loan defaults. The bank insured a loan portfolio of approximately Rs 20,807 crore under the CGFMU scheme. Approximately 85% of the insured CGFMU portfolio has been repaid, while the remaining 15% turned into non-performing assets, that were written off as of March, it said.

Approximately 85% of the insured CGFMU portfolio has been repaid, with the remaining non-performing assets fully provided for and written off as of March, according to the statement by the bank.

In addition, the bank reported recoveries of approximately Rs 228.40 crore from accounts covered under the CGFMU scheme, according to the statement.

The said payout of Rs 314.68 crore and recoveries of approximately Rs 228.40 crore from the first tranche claim will be accounted for in the bank's profit and loss statement as part of 'Other Income.'

The bank also noted that any recoveries made after March on eligible accounts will be returned to NCGTC. Additionally, Bandhan Bank has raised a claim of approximately Rs 508 crore under the ECLGS scheme, with Rs 161.13 crore settled by NCGTC. The remaining amount of Rs 347 crore is pending until the outcome of the forensic audit, which has now been concluded.

Besides, the bank has also received an approval from the Reserve Bank of India to appoint banking industry veteran Partha Sengupta as its next chief executive officer and managing director, according to a separate statement to the exchanges.