The Kolkata-based lender is moving away from volatile, big-ticket corporate deposits to shield itself from high interest costs and strict central bank limits.
KOLKATA, July 22 — Bandhan Bank has aggressively dumped nearly ₹7,000 crore of high-cost corporate deposits as it scrambles to escape expensive funding traps. Managing Director and CEO Partha Pratim Sengupta revealed the lender slashed these big-ticket, volatile accounts by 12.7 per cent year-on-year to protect its profit margins. It’s a calculated gamble that shifts the bank’s survival strategy away from fickle corporate treasuries and onto everyday retail savers.
Average retail term deposits shot up by 23.4 per cent to reach ₹733.6 billion, helping individual savers claim 74 per cent of the bank’s total deposit pie. But the bank’s rapid loan growth has still pushed its credit-to-deposit ratio to a remarkably tight 95 per cent. Total deposits sit at ₹1.65 lakh crore against ₹1.56 lakh crore in active loans, leaving very little breathing room. Sengupta openly admitted that traditional banks can’t remain dependent only on standard deposits to fuel their credit needs. So, the leadership is actively hunting for entirely different avenues to bankroll their future growth.
They’re targeting major state-backed development lenders like NABARD and the National Housing Bank to bridge the gap.
These specialized institutional loans don’t carry the strict Cash Reserve Ratio or Statutory Liquidity Ratio mandates that usually force banks to lock up large chunks of cash with the reserve bank. Sengupta pointed out that borrowing from these development bodies happens at a much lower rate compared to the pricey corporate accounts they just shed. But can a major retail bank truly sustain its massive nationwide growth using development funds instead of traditional public deposits? It’s a critical financial experiment that the entire sector is watching closely.
The bank is also actively keeping the door open to securitisation, which involves packaging and selling off bundles of their existing loan assets to corporate investors to raise immediate cash.
And the lender isn’t stopping at domestic boundaries. They’ve just launched a new program to pull in foreign currency deposits from overseas Indians, offering a competitive 7.1 per cent interest rate. They’ve raised ₹30 crore under this special Reserve Bank of India swap facility so far, and Sengupta expects that figure to swell significantly over the next two months.
The bank’s baseline stability is showing clear signs of improvement despite the aggressive restructuring. Its Current Account Savings Account ratio—a key measure of cheap, stable daily deposits—climbed by 234 basis points to hit 29.4 per cent. Management wants bulk corporate deposits to shrink gradually as they mature into a highly granular, retail-funded network.
The days of relying on volatile, ultra-expensive corporate cash are officially over.
