Bandhan Bank to Take ₹1,250 Crore Provisioning Hit from Credit Loss Framework Adjustment

Mumbai: Bandhan Bank Estimates ₹1,250 Crore Provisioning Impact from ECL Framework Shift

The Reserve Bank of India (RBI) directed banks to transition to the expected credit loss (ECL) framework for recognizing stressed loans, a move that is expected to have a significant impact on lenders. Bandhan Bank, one of the leading private sector banks in the country, estimates a one-time provisioning impact of about ₹1,250 crore from the shift.

The central bank has given lenders a glidepath to implement the ECL framework in full by 31 March 2031, with a deadline of 1 April 2027 for lenders to adopt the new framework. The estimate is based on the balance sheet as of 31 December 2025, and the final impact could be similar or slightly lower when the transition takes place in April 2027.

Bandhan Bank reported a net profit of ₹534 crore for the March quarter (Q4FY26), up 68% year-on-year and 160% sequentially, driven largely by stronger non-interest income. The bank's non-interest income rose 10.2% year-on-year (YoY) and 11.6% quarter-on-quarter (QoQ) to ₹770 crore.

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The bank's net interest income (NII) rose 1.4% YoY and 4% QoQ to ₹2,796 crore, while net interest margin (NIM) stood at 6.2%, compared with 5.9% in the previous quarter and 6.7% a year earlier. The sequential improvement in margins was driven by a lower cost of funds and reduced slippages.

Bandhan Bank has been reducing its reliance on high-cost savings accounts and shifting towards granular retail deposits, which pulled savings account costs down to 3.9% from 5.5% a year ago. The bank's total deposits rose 10% YoY and 6% QoQ to ₹1.7 trillion as of March 2026, with low-cost current account and savings account (CASA) deposits accounting for 29% of total deposits, up 200 basis points year-on-year.

Operating expenses, however, weighed on profitability, rising 12.8% YoY and 9.9% QoQ to ₹2,130 crore. Management attributed the increase to ₹60 crore spent on priority sector lending certificates, ₹61 crore of technology investments, and higher staff costs.

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Advances rose 12.6% YoY and 6.2% on quarter to ₹1.5 trillion as of 31 March, with managing director and chief executive officer Partha Pratim Sengupta saying the focus remains on improving the share of secured loans and expanding distribution.

The bank expects loan and deposit growth in FY27 to broadly track industry trends. "Currently, deposits are growing around 10% and credit around 11–12%, so we will try to maintain the same industry pace," Sengupta said.