Bandhan Bank pegs ₹1,250 crore provisioning hit from credit loss framework shift
MUMBAI: A day after the Reserve Bank of India (RBI) directed banks to switch to expected credit loss (ECL) framework to recognize stressed loans, Bandhan Bank on Tuesday said it has estimated one-time provisioning impact. ₹1,250 crore from shift.
The central bank said on Monday that lenders must adopt the ECL framework from April 1, 2027, and provide a transition path for the framework to be fully implemented by March 31, 2031.
“We are assessing a rough transition effect ₹Finance chief Rajiv Mantri said in the bank’s Q4 earnings call that incremental provisions of ₹1,250 crore will be made during the transition, adding that the annual impact will be as follows: ₹250-300 crore, depending on the bank being able to amortize it in four or five years.
The forecast is based on the balance sheet as of December 31, 2025, and if the transition occurs in April 2027, the final impact could be similar or slightly lower, Mantri said.
Bandhan Bank announced net profit ₹For the March quarter (4Q26), it stood at Rs 534 crore, up 68% year-on-year and 160% sequentially; this was up 10.2% year-on-year (YoY) and 11.6% quarter-on-quarter (QoQ), driven largely by strong non-interest income. ₹770 crore.
Net interest income (NII) increased 1.4% annually and 4% quarterly ₹2,796 crore. Net interest margin (NIM) stood at 6.2%, compared to 5.9% in the previous quarter and 6.7% a year ago.
The sequential improvement in margins was due to lower cost of funds and reduced slippages, Mantri said, adding that NIMs are expected to improve further in FY27 and end the current fiscal year at least 20-30 basis points higher.
Mantri said the improvement in funding costs was helped by a reduction in high-cost savings accounts and a shift to itemized retail deposits, which reduced savings account costs to 3.9% from 5.5% a year ago, even as total savings deposits fell 5.3%.
“Similarly, our term deposits are also being repriced. Some of these came up for repricing in Q4, but we have some more repricing expected in Q1 and Q2 (FY27) as well,” he said.
Total deposits increased by 10% year-on-year and 6% quarter-on-quarter ₹1.7 trillion as of March 2026. Low-cost current and savings account (CASA) deposits accounted for 29% of total deposits, up 200 basis points year-on-year.
Mantri said the bank has reduced dependence on bulk deposits, which were down around 7% on an annual basis, while retail deposits, including a 30% growth in individual term deposits, grew around 18% on an annual basis. Current account deposits also increased by 33%, further supporting the cost of funds.
However, operating expenses increased by 12.8% year-on-year and 9.9% quarterly, putting pressure on profitability. ₹2,130 crore. Management attributed the increase to this ₹60 crore spent on priority sector credit certificates, ₹61 million technology investment and higher personnel costs.
Advances increased 12.6% year-on-year and 6.2% quarter-on-quarter ₹1.5 trillion as of March 31, managing director and chief executive officer Partha Pratim Sengupta said the focus remains on improving the share of secured loans and expanding distribution.
The bank expects loan and deposit growth in FY27 to broadly follow industry trends. “Currently, deposits are growing around 10% and loans are growing around 11-12%, so we will try to maintain the same industry pace,” Sengupta said.
