Is Bandhan banking too much on microfinance?

Why read this story?

Editor's note: In March 2018, some of India’s largest private sector banks were in the throes of a crisis, coming under increasing fire from the Reserve Bank of India for under-reporting their non-performing assets. The heads of two such banks were under a cloud and the private banking space, after two years of solid performance, seemed to have run into some strong headwinds. It was against this background that Kolkata-headquartered Bandhan Bank listed. It’s listing price of Rs 487 was a 30% premium to the issue price, and in the next three months, the stock rose to Rs 700, returning more than 100% to investors in the company’s initial public offer.  It was then touted as a success story of founder Chandra Shekhar Ghosh, a man who had made a name for himself by lending small sums of money to credit-deprived sections of society, largely in the eastern parts of India. His business was so good that though he borrowed money from private and state-owned banks, his margins were better than all of them by a long measure. Bandhan’s net interest margin …