E&Y is conducting audit on Bandhan Bank’s 51 lakh microfinance borrower accounts as part of its mandate to examine the Rs 22750 crore worth of loans against which the bank sought insurance claims from the government.
Bandhan Bank managing director Chandra Shekhar Ghosh has denied about any irregularity in those accounts and evergreening of loans.
“The audit issue is taking time to resolve because it involves a humungous 51 lakh borrower accounts. Stakeholders should not worry about it,” Ghosh told in an interview .
These loans are backed by two separate government guarantee schemes.
“There is also no question of evergreening of loans as we follow a business model wherein we offer fresh loans only after full repayment of the existing loans. Only emergency loans were provided on top of an existing loan during Covid to help borrowers to tide over the crisis under the Emergency Credit Line Guarantee Scheme of the government,” he said.
The bank has taken insurance cover under Credit Guarantee Fund for Micro Units against a Rs 20,800 crore of microfinance loans disbursed in FY21. It had also disbursed over Rs 1,950 crore under the Emergency Credit Line Guarantee Scheme in the same year.
Ghosh also said that the bank continues to recover dues from the portion of loans against which insurance claims are made and this would be adjusted when the government will pay the next phase of insurance claims.
The bank had claimed and received an amount of Rs 917 crore from the National Credit Guarantee Trustee Company in December, 2022. It has made an additional claim of Rs 1,296 crore in the second quarter of FY24 but the payment is subject to the result of the audit.
The total claimed amount so far is much lower than the maximum eligible amount, which is 15% of the total amount involved.
“We have recovered Rs 214 crore, which is one-fourth of the insurance claim we received from the government as part of the first claim. So, this will be adjusted against the next payment” he said.
NCGTC had initially conducted a sample audit after the second claim. It has later decided to do a full-fledged one on the entire claim.
