"I CAN PLAY A STRATEGIC ROLE WITHIN THE HOLDING COMPANY OF THE BANK"

Bandhan Bank Founder, MD & CEO Chandra Shekhar Ghosh on the leadership transition, his plans, and microfinance

- ANAND ADHIKARI

CHANDRA SHEKHAR GHOSH, the Founder, MD, and CEO of Bandhan Bank, was one of the fortunate few to secure a full-scale banking licence. The 64-year-old transformed what started out as a microfinance institution (MFI) into a bank, providing credit access to the underserved and unbanked. However, Bandhan's journey as a bank has seen asset quality and profitability challenges post-Covid and other disruptions. Ghosh, whose recent decision to step down has surprised many in the industry, exits office on July 9. In an exclusive interview with Business Today, Ghosh discusses the microfinance models, his decision to retire, and his new role in the group.

Edited excerpts: You created a business model focussed on serving the unbanked and underserved, a market often perceived as risky by banks. Should this model be regulated and treated differently?

When an industry is new, flexibility is crucial to provide services to the people. However, as the industry scales, it requires more control, compliance, and governance. Otherwise, its future growth will be hindered. When I was managing an NGO or an NBFC, my customer base and reach were relatively limited. You cannot manage 30 million customers in a bank today in the same manner as I did with 5 million customers 10 years ago. Scaling up involves relying on a large number of people and layers. When you are small, you can be directly involved, but as you grow the business, it becomes essential to have well-established compliance and risk mitigation processes and systems in place. Without these, the business' future growth will be impacted.

Is risk management the biggest learning experience for this kind of model under a banking platform?