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Context is everything.
Detailed stories on technology startups, business and economic current affairs.
Detailed stories on technology startups, business and economic current affairs.
The small finance bank’s founder seems to be losing his top executives and investor confidence at a time when stress on the books is building.
Editor's note: On 1 December 2019, when HDFC Bank’s digital banking head Nitin Chugh took the reins at Ujjivan Small Finance Bank from its founder Samit Ghosh, he was given a three-year tenure. But halfway through, in August 2021, Chugh abruptly resigned as managing director and CEO. Chugh isn’t the lone top-level exit from the bank; 12 people in senior management positions have left in just the last year. There have also been five resignations at the board level, and over 20 resignations two levels below Chugh’s. The resignations come at a time when the bank is facing mounting stress in its books. As of today, Ujjivan SFB’s gross bad loan ratio is 10x what it was a year ago. Almost two-thirds of the bank’s net worth is stuck in bad loans. In our interactions with former executives at the bank, one thing comes across clearly—constant interference from Ghosh is the reason why many of them left. Additionally, Ghosh is losing institutional investors, who have been dumping the bank’s stock in the markets. The regulator too doesn’t seem too pleased. The bank …
The central bank’s shift to a 100% collateral requirement threatens to erode leverage, reduce volumes and force a consolidation across prop desks.
High returns, RBI-regulated comfort, and easy withdrawals drew investors in. Now, with repayments drying up, the fintech platform, its NBFC partner, and the regulator are pointing fingers—leaving customers to chase their own money.
The RBI’s unusually harsh order raises deeper questions about management credibility—and whether investors should take assurances at face value.
