Why are Bandhan Bank Shares Up by 12%? : RBI's Key Decision

Why is Bandhan Bank Share up by 12%? | RBI’s one decision is Responsible

 You are here to know Why is Bandhan Bank share going up? Well you are at the right place. 

RBI, the regulatory body, has cleared Partha Pratim Sengupta, to become the new Managing Director and CEO of Bandhan Bank. But wait, why is the market excited for this event? And why so much hype about  Partha Pratim Sengupta? Who is he and what’s in next for Bandhan Bank? 

Well , in this blog, we are covering reason behind  the Bandhan bank’s rally, what is next for Bandhan bank after new MD and CEO  and highlights of Q2 result, 2024-25. Lets dive…

Who is Partha Pratim Sengupta?

Partha Pratim Sengupta possesses an Honours Degree in Physics, as well has the Certificate Course in Banking from the Indian Institute of Banking. He has undergone Leadership Development courses in world-class institutions like Harvard Business School, IIM Calcutta and ISB Hyderabad. Sengupta has 40 years of banking experience, starting his career at SBI where he later became an executive director and chief credit officer. After also being the MD and CEO of Indian Overseas Bank (IOB) from July 2020 to December 2022.

On October 9, 2024, Sengupta assumed the office of MD and CEO at Bandhan Bank. One day later, he made it clear that he would divest some of his other roles due to the mandate of the RBI. He is expected to serve this period of three years beginning November 10, 2024, subject to the Nomination and Remuneration Committee of the bank. The bank views his experience particularly in West Bengal, as an added value to Bandhan Bank. 

Stock Performance

At 9:30 AM, Bandhan Bank shares were priced ₹200.8 which is a 7 percent rise from yesterday’s close. And this increase is a surprise in the stock market because investors are starting to believe in the bank’s prospects nowadays because of its new management and the continued implementation of the company’s strategies.

What Lies Next for Bandhan Bank

Apart from just sucking up the new management bonne-example, which is Bandhan Bank’s dark sigh, there are other optimistic things ahead concerning the following outcomes: It is anticipated that a focus on Strategic growth will lead to new internal appointments on Acius Sengupta’s building up on the West Bengal region.

Profit Boost from CGFMU Claims: These Funds become very important in terms of profitability with profit funds of up to Rs 320 crores from Credit Guarantee Fund for Micro Units (CGFMU) expected for making funds available for growth and improvement of operations.

Tech Upgrades: The bank will also seek to look for new technology that will help improve the customer experience and make the processes more efficient including improvements on the current digital systems.

Market Expansion: Bandhan bank should seek out more opportunities in extending their geographical reach that will, in turn, result in a new customer and revenue base.

Strengthened Risk Management: On this note, the chances are that the bank might turn its attention towards addressing the risk management issue with regard to financial risks.

Positive Investor Sentiment: Analysts are quite positive as we have a target of 240 spare rupees according to them, recent developments could enhance their ability to attract investors.

Q2 Business Update: A Strong Performance

Recent business transactions tabled Bandhan Bank to the performance expectations in business. The private sector lender registered total business growth of 24.6% and recorded INR 273,163 crore in the second quarter of the financial year against INI219,712 last year quarter.

Each of the Key Highlights from Q2 Performance:

Loans and Advances: ₹1,30,652 crore

Deposits: ₹1.42 lakh crore

Collection Efficiency Ratio: 98.2% for all business lines which is down from 98.7% the previous quarter rate.

Conclusion

With the country’s growth story in place and the new young and seasoned leader in place, Bandhan bank will surely be an exciting ride. Investors and market watchers are all waiting impatiently for the next act to this growing star in the banking industry!