Bandhan Bank’s Credit Guarantee Portfolio of Rs 23,300 Crore Under Audit admin, February 5, 2024 The National Credit Guarantee Trustee Co. has requested a forensic audit of loans totaling Rs 23,300 crore at Bandhan Bank Ltd. The loans under review are part of the Credit Guarantee Fund Scheme for Micro Units and the Emergency Credit Line Guarantee Scheme, for which the bank registered and obtained guarantees. The two schemes aimed to provide emergency credit to small borrowers and offer banks government guarantees against at least a portion of the losses during the Covid pandemic. The NCGTC is conducting a “detailed” audit of the CGFMU portfolio for FY21, clarifying that this is not an audit initiated by the regulator but only for the CGFMU claim made by the bank. The audit will focus on the ECLGS and CGFMU portfolios after a preliminary audit revealed concerns and resulted in the decision to initiate a forensic audit. The review period for the CGFMU portfolio is FY21, during which around 5.5 lakh borrowers for loans amounting to Rs 4,000 crore have been classified as NPAs. Regarding the ECLGS portfolio, the review period ranges from May 2020 to June 30, 2021, with around 7.55 lakh borrowers classified as NPAs and outstanding dues worth Rs 955 crore, mainly spread across West Bengal, Assam, and Odisha. Although the forensic audit is for the entire portfolio, the focus remains on the 4.9 lakh borrowers classified as NPA. Bandhan Bank’s net profit rose to Rs 721 crore in the second quarter, but its asset quality worsened with the gross non-performing asset ratio rising to 7.3%. The bank’s management attributed the rise in NPAs post-Q4 FY23 to the way loans under the CGFMU and ECLGS were disclosed in their books. The bank’s stress pool coverage in March 2023 stood at Rs 5,500 crore, with a provision of Rs 3,800 crore and the CGFMU guarantee of Rs 1,700 crore. In Q2 FY24, the bank applied for the second tranche of the CGFMU claim and also received Rs 85 crore in ECLGS, with Rs 410 crore pending. Bandhan Bank is yet to declare its December quarter results. Bandhan Bank Ltd.