Bandhan Bank Faces Detailed Audit by NCGTC Over CGFMU Claims

In a recent development, the National Credit Guarantee Trustee Company (NCGTC) has announced a detailed audit of claims submitted by Bandhan Bank related to non-performing loans issued under the government’s credit guarantee scheme for micro units (CGFMU).

Bandhan Bank, a private sector lender, had applied for the second tranche of the CGFMU claim, totalling almost Rs 1290 crore, after receiving the first tranche. The NCGTC conducted a preliminary sample audit on the application and has now decided to carry out a comprehensive audit for the CGFMU portfolio for the financial year 2020-21, as disclosed in a regulatory filing to stock exchanges by the bank on Tuesday.

Importantly, Bandhan Bank clarified that this audit is specifically related to the CGFMU claim made by the bank and not an overall audit initiated by the regulator on the bank itself. The bank assured its full cooperation in the audit process and expressed confidence in receiving the claimed sum.

Bandhan Bank’s gross non-performing assets (NPA) ratio rose to 7.3% by the end of September last year, up from 6.8% in the previous quarter. The NPA attributed to micro and small loans reached a significant 10.4%.

Despite recent challenges, the bank has recovered Rs 1600 crore from the credit guarantee fund by the end of the second quarter, addressing a portion of the total stressed micro and small loans amounting to Rs 6900 crore.

On a positive note, Bandhan Bank’s share price experienced a recovery of 0.8% on Tuesday, reaching Rs 234.90, after facing a decline of nearly 4.5% in the last few trading sessions.