Bandhan Bank is expecting a 15-20 per cent growth in credit offtake in FY21 backed by a steady pick up in demand.
Chandra Shekhar Ghosh, Managing Director and CEO, Bandhan Bank, said that the credit demand, which is generally muted in the first two quarters of a fiscal, starts picking up in the third quarter. But even in the first quarter (April-June 2020), the bank managed to disburse advances of around ₹3,116 crore.
The bank’s total advances grew by 18 per cent to ₹74,331 crore as on June 30 this year as against ₹63,164 crore recorded in the same period last year.
“From credit demand and repayment point of view, things are clearly normalising and are expected to further normalise by September-October this year. Credit demand typically starts picking up around the festive season now we need to see how the festive season turns out this year,” Ghosh told BusinessLine.
With a capital adequacy ratio of 26.53 per cent, the bank is comfortable on the capital front and has no immediate plans of raising capital.
Bandhan Bank’s collection efficiency, which had dropped to as low as 29 per cent in April 2020, has bounced back to nearly 76 per cent as on June 2020. Microcredit accounts for nearly 60 per cent of the bank’s total advances. The collections from microcredit portfolio which had dropped to almost zero in April, has improved to 68 per cent as on June 30, 2020. This has further improved to close to 73 per cent as on date.
“Both Assam and Bihar were severely affected by floods and that has impacted (collections) to some extent. Moreover, due to the lockdown in some States, the collection up to July is 73 per cent which could have been close to 80 per cent but for these factors,” he said.
The collection efficiency is expected to improve to 80 per cent by July-end and 90 per cent in August. By September it would be close to 95-97 per cent (the pre Covid levels), he added.
“The customer who has started repaying is continuing to do so which shows the overall repayment culture. Post lockdown, people have been focussing on their livelihood and are trying to keep up their repayments so as to maintain a good relation with banks. I expect collection efficiency to improve further,” he said.
The bank, which had posted a net interest margin of 8.15 per cent, is expecting to maintain it steady at these levels by the end of this fiscal.