Bandhan Bank , a prominent player in India's banking sector, has taken a significant step towards improving its asset quality by approving the sale of non-performing assets (NPAs) and written-off assets. The bank's board of directors has given the green light to offload assets with a principal outstanding amount of Rs 32.12 billion through the Swiss Challenge method, marking a crucial move in the bank's efforts to clean up its balance sheet.

Key Highlights of the Asset Sale

• Total Value: The approved sale includes NPAs and written-off assets worth Rs 32.12 billion.
• Sale Method: The bank will employ the Swiss Challenge method for the sale process.
• Asset Categories: The sale encompasses assets from the bank's Emerging Entrepreneurs Business (EEB), including group loans and small business agri loans, as well as the Aspiring Business Group (ABG).

Breaking Down the Asset Sale

The asset sale is divided into two main components:

1. NPA Portfolio:

   • Principal outstanding: Rs 3,212.17 crore
   • Criteria: NPAs with more than 180 Days Past Due
   • Sale Method: Swiss Challenge

2. Written-off Loan Portfolio:

   • Principal outstanding: Rs 3,719.14 crore
   • Sale Method: Auction route

Impact on Bandhan Bank's Financial Position

To understand the potential impact of this asset sale on Bandhan Bank's financial health, let's look at some key figures from its recent balance sheet:

The proposed sale of Rs 32.12 billion (equivalent to Rs 3,212 crore) in NPAs represents a significant portion of the bank's current assets. This move is likely to have a substantial impact on the bank's asset quality and could potentially lead to improved financial ratios in the coming quarters.

Strategic Implications

1. Balance Sheet Cleanup: This initiative demonstrates Bandhan Bank's commitment to addressing asset quality concerns and strengthening its financial position.

2. Risk Management: By offloading non-performing and written-off assets, the bank aims to reduce its risk exposure and potentially improve its credit ratings.

3. Regulatory Compliance: The move aligns with regulatory expectations for banks to maintain healthy asset quality and adequately manage non-performing assets.

4. Investor Confidence: A successful execution of this asset sale could boost investor confidence in the bank's proactive approach to managing its loan portfolio.

Conclusion

Bandhan Bank's decision to sell Rs 32.12 billion worth of NPAs and written-off assets marks a significant step in its efforts to streamline its balance sheet and improve overall asset quality. As the bank moves forward with the Swiss Challenge method and auction process, market observers will be keenly watching the execution and impact of this strategic move on the bank's financial health and market position.

Investors and stakeholders should continue to monitor the progress of this asset sale and its effects on Bandhan Bank's financial metrics in the coming quarters. The success of this initiative could set a precedent for similar moves by other banks in the Indian banking sector, potentially influencing industry-wide practices in managing distressed assets.

Bandhan Bank has initiated a postal ballot process to seek shareholder approval for the appointment of two directors to its board. The bank aims to strengthen its leadership team with these strategic additions, focusing on enhancing its expertise in finance, technology, and banking operations.

Proposed Appointments

Avijit Mukerji as Non-Executive Non-Independent Director

• Nominated by Bandhan Financial Holdings Limited (BFHL), the bank's promoter
• A Chartered Accountant with over three decades of experience in audit and assurance
• Former partner at PricewaterhouseCoopers India
• Appointment effective from September 25, 2025

Gauri Prosad Sarma as Independent Director

• Brings 37 years of banking experience
• Former Chief General Manager at Punjab National Bank
• Expertise in digital banking, fintech, and IT operations
• Proposed for a three-year term, effective October 28, 2025

Voting Process and Timeline

Shareholders can cast their votes through remote e-voting, with the process facilitated by KFin Technologies Limited, the bank's Registrar and Share Transfer Agent.

Director Profiles

Avijit Mukerji

• Age: 56 years
• Qualifications: B.Com. (Hons.), Chartered Accountant
• Expertise: Accountancy, Finance, Audit, and Assurance
• Other Directorships: Balaji Telefilms Limited, India Carbon Limited, Bandhan Financial Holdings Limited, The Bengal Club Ltd

Gauri Prosad Sarma

• Age: 62 years
• Qualifications: M.Sc., B.Sc. (Hons.)
• Expertise: Banking, Information Technology, Cyber Security, Payment & Settlements, Fintech, and Risk Management
• Other Directorships: B & A Limited, B & A Packaging India Limited

Significance of the Appointments

The proposed appointments are aimed at enhancing the bank's board composition with diverse expertise. Mr. Mukerji's extensive experience in audit and assurance is expected to strengthen the bank's financial oversight. Mr. Sarma's background in banking operations and digital transformation aligns with the bank's focus on technological advancements and operational excellence.

These appointments, if approved, could potentially contribute to Bandhan Bank's strategic direction and governance structure, particularly in areas of financial management, digital banking, and risk assessment.

Shareholders are encouraged to review the detailed profiles and voting instructions provided in the postal ballot notice to make informed decisions on these crucial appointments.