RBI appoints veteran Arun Kumar Singh to Bandhan Bank board

The Reserve Bank of India (RBI) has appointed Arun Kumar Singh, a retired chief general manager of the RBI, as an additional director on the Board of Bandhan Bank. His term will run from June 24, 2024, to June 23, 2025, as announced by the bank on June 24.

Amid this development, shares of Bandhan Bank dropped by 1.34% to ₹204.95 apiece on the BSE today.

Singh, aged 60, brings nearly 36 years of experience in the RBI. He holds a degree in economics, an MBA in finance and HR, and is a certified associate of the Indian Institute of Banking (CAIIB). Singh has held various roles across Non-Banking Supervision & Regulation, Banking Supervision & Regulation, Financial Inclusion, Monetary Policy, Information Technology, and Government Banking. Additionally, he has overseen enforcement actions against banks and non-banks.

Singh has also served as an RBI nominee director on the boards of five banking and non-banking entities and spent three years as the regional director for the state of Rajasthan.

The appointment comes ahead of the retirement of Bandhan Bank’s managing director and CEO, Chandra Shekhar Ghosh, who is set to step down on July 9, 2024. Ghosh will then transition to a role within the Bandhan group. The bank is currently searching for a new CEO, with recruitment firm Egon Zehnder tasked with identifying suitable candidates.

In the beginning of April month, Bandhan Bank, in an exchange filing, announced that during its board meeting on April 5, 2024, the Board of Directors acknowledged a letter from Ghosh, the managing director and CEO since July 10, 2015. In the letter, Ghosh informed the Board of his decision to retire from his position as MD and CEO at the end of his current tenure on July 9, 2024.

After nearly a decade of leadership and three consecutive terms as MD and CEO, Ghosh expressed that it was time for him to take on a larger strategic role. He requested the Board to accept his decision and conveyed his gratitude for their ongoing support and advice, which he described as a great source of strength. Ghosh left his secure job 23 years ago to embark on his entrepreneurial journey, founding Bandhan as an NGO in 2001.

"I started with my savings, contributions from some relatives and borrowings from moneylenders. Once the model was proven, financial institutions came forward to lend and support. In 2006, Bandhan acquired a Non-Banking Finance Company (NBFC) and named it Bandhan Financial Services Ltd (BFSL). BFSL moved on with microfinance activities, while the NGO continued with development work. It became the largest microfinance institution in the country in 2010. It was a matter of pride to see how Bandhan had positively changed the lives of women borrowers, turning them into successful entrepreneurs. The success stories of the borrowers, their confidence and empowerment, became the impetus for me to think bigger. In 2013, the Government of India announced guidelines for issuing fresh bank licences. BFSL and I jointly applied for a banking licence in July 2013," Bandhan Bank CEO said in his letter to the Board.

"Bandhan Bank will always enjoy a special place in my heart, and I will always be available for any help or advice the Bank may need," Ghosh added.