Bandhan Bank has reported a significant improvement in collection efficiency, according to a regulatory filing reviewed by The Economic Times. The Kolkata-based lender saw its repayment rates climb to pre-pandemic levels in key segments, suggesting a broader recovery in India’s microfinance and retail banking sectors.
Analysts attribute the uptick to seasonal factors and government stimulus measures. “Rural cash flows have strengthened after the harvest season, and urban collections are benefiting from renewed economic activity,” said a Mumbai-based banking analyst who requested anonymity due to company policy.
The bank’s microfinance portfolio—which constitutes nearly half its loan book—showed particular resilience. Sources familiar with the matter noted collection efficiency crossed 95% in January-March 2024, up from 88% in the previous quarter. This aligns with Reserve Bank of India data showing system-wide improvement in non-performing assets.
However, some risks persist. “While near-term collections look robust, we’re watching monsoon forecasts closely,” cautioned a senior banking official. “Agricultural output remains critical for Bandhan’s core customer base.” Market observers suggest the bank may face margin pressures if interest rates remain elevated.