In an unexpected move that rattled investors, the stock value of Bandhan Bank nosedived on the bourses following the news of Chandra Shekhar Ghosh’s imminent departure from his key roles as founder, Managing Director, and CEO. The seasoned banker, who has been at the helm since the bank’s inception, will demit his office at the close of his current tenure, as confirmed by recent regulatory filings.
The shockwaves from this announcement caused the bank’s shares to plummet by 6.31 per cent, closing at Rs 184.95 on the Bombay Stock Exchange (BSE). The dip was even more stark during intraday trading, with shares nosediving by 9 per cent to a low of Rs 179.55.
A similar downtrend was mirrored on the National Stock Exchange (NSE), where the bank’s shares closed at Rs 185.10, down by 6.20 per cent. The shares had earlier taken a sharp dip during the day, falling by 9.17 per cent to Rs 179.25.
Investors’ nervousness was evident as Bandhan Bank’s market capitalization shrank by a massive Rs 2,004.42 crore, bottoming out at Rs 29,794.89 crore. The trading volume was sizeable, with approximately 55.90 lakh shares changing hands on the BSE and a significant 641.95 lakh shares traded on the NSE.
Ghosh’s impending retirement, slated for July 9, 2024, draws a curtain on nearly a decade of leadership, including three back-to-back terms as the bank’s MD and CEO. Through a heartfelt letter addressed to the board, Ghosh expressed his desire to transition to a more strategic role within the Bandhan group, a testament to his commitment to the bank he steered from its formative years.
His departure occurs in compliance with the Reserve Bank of India’s (RBI) regulations, which stipulate that the tenure of the MD and CEO of private banks be capped at 15 years. Bandhan Bank’s journey began on August 23, 2015, and in a short span, it established a broad network with 501 branches and 50 ATMs across 24 states.
The bank’s evolution from a microfinance institution to an esteemed universal bank is a significant milestone for the Eastern region of India. Their successful listing in 2018 marked another leap forward, and this was followed by the acquisition of Gruh Finance in 2019, enhancing their offerings with more affordable banking solutions for the burgeoning home buyer market.
As investors process the impact of Ghosh’s eventual departure, the bank emphasizes its continued dedication to serving its vast customer base with the same zeal and service excellence that marked Ghosh’s nearly decade-long tenure.
The legacy Ghosh leaves behind is indelible — under his stewardship, Bandhan Bank transcended its microfinance roots to become a respected full-service bank, contributing significantly to financial inclusion. As the bank prepares for its transition to new leadership, the corporate world watches closely, anticipating the next chapter in Bandhan Bank’s remarkable growth story. For now, as is typical in the financial markets, the unexpected news has resulted in some turbulence, but Bandhan Bank is poised to navigate these changes while retaining its strong foundational ethos that has been the hallmark of its success.
