ICRA downgrades rating outlook on Bandhan Bank to 'negative'

Stress in small business loans triggers action

Rating agency ICRA has downgraded the rating outlook on Bandhan Bank from ‘stable’ to ‘negative’ following the sustained weakness in its emerging entrepreneur business (EEB) portfolio despite the improvement in collections in Q2 FY2022.

It reaffirmed ratings assigned to debentures and term loans from banks.

The gross stress pool in the EEB segment - increased to Rs 19,457 crore (36 per cent of the EEB portfolio) as on September 30, 2021 compared to Rs 15,657 crore, (29.4%) as on June 30, 2021. The stress loan pool comprises of gross Non-performing assets + gross restructured assets + Special mention accounts in category 1