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Bandhan Bank: Bandhan Bank has reduced nearly ₹7,000 crore worth of bulk deposits over the past year as part of its strategy to lower funding costs and build a stronger retail deposit base. The bank is now evaluating borrowings from financial institutions and securitisation to support future credit growth while continuing to expand its retail franchise.
Speaking during the Q1 FY27 earnings call, Managing Director & CEO Partha Pratim Sengupta said the lender has deliberately shifted away from expensive and volatile bulk deposits.
“We have decreased our bulk deposit by almost ₹7,000 crore, which is around a 12.7% year-on-year decline. At the same time, our retail deposits have increased by 16%,” Sengupta said.
💰 Retail Deposits Drive Stronger Growth
Bandhan Bank’s latest investor presentation highlights a significant improvement in its deposit mix.
Key Highlights 📊
- ✅ Bulk deposits, including Certificates of Deposit (CDs), declined 9.7% YoY to ₹41,440 crore (average basis).
- ✅ Average retail term deposits surged 23.4% to ₹73,360 crore.
- ✅ Retail deposits now contribute 74% of total deposits, up from 68.2% a year ago.
- ✅ Overall retail deposits increased 16% YoY.
The shift toward retail deposits is expected to provide greater stability, lower funding costs, and reduce dependence on high-cost institutional money.
🚀 Bandhan Bank Looks Beyond Deposits for Credit Growth
Sengupta emphasized that banks can no longer rely solely on deposits to finance rising credit demand.
“No longer can the banks remain dependent only on deposits. We have to find alternate ways to fund the credit needs, and one of them is definitely borrowing.”
To diversify its funding sources, Bandhan Bank is evaluating borrowings from development finance institutions, including:
- 🏛️ NABARD
- 🏦 National Housing Bank (NHB)
According to the bank, these borrowings come at significantly lower interest rates than bulk deposits and do not require maintaining Cash Reserve Ratio (CRR) or Statutory Liquidity Ratio (SLR), making them a more efficient funding option.
“We are borrowing at a much, much lower rate compared to the bulk deposits, and which also does not have a CRR-SLR impact,” Sengupta said.
🔄 Securitisation Emerges as Another Funding Avenue
Apart from institutional borrowings, Bandhan Bank is also considering securitisation to unlock additional liquidity.
Under this strategy, the lender can package and sell a portion of its loan portfolio to investors, generating fresh funds without significantly impacting its balance sheet.
“We can also do some credit funding through securitisation of our own assets. That is another path which has been kept open,” Sengupta added.
This approach could help the bank maintain healthy loan growth while improving capital efficiency.
📱 Retail Deposit Mobilisation Remains the Top Priority
Despite exploring alternative funding channels, Bandhan Bank says deposit mobilisation continues to remain its primary strategy.
The lender is introducing:
- 📲 Enhanced digital banking services
- 💳 New deposit products
- 😊 Improved customer experience initiatives
These efforts are aimed at attracting more retail customers and strengthening its long-term deposit franchise.
📊 Bandhan Bank Q1 FY27: Key Financial Numbers
As of June 30, 2026, the bank reported:
- 💰 Total Deposits: ₹1.65 lakh crore
- 💳 Gross Advances: ₹1.56 lakh crore
- 📈 Credit-Deposit Ratio: Around 95%
- 🏦 CASA Ratio: 29.4%, up 234 basis points year-on-year
The improved CASA ratio indicates a higher share of low-cost deposits, which supports profitability.
📉 Bulk Deposits to Reduce Further
According to Sengupta, bulk deposits currently account for 25–26% of total deposits.
As Bandhan Bank continues expanding its retail customer base, management aims to maintain a healthier and more diversified liability mix, reducing dependence on volatile wholesale funding over the long term.
🌍 FCNR(B) Deposits to Attract Overseas Funds
Bandhan Bank is also tapping opportunities under the RBI’s FCNR(B) deposit scheme to attract deposits from Non-Resident Indians (NRIs).
The bank has already mobilised ₹30 crore under the scheme and is currently offering an attractive 7.1% interest rate.
“We have just launched the product. We expect that we can garner much more in the coming two months,” Sengupta said.
🔍 Why This Matters
Bandhan Bank’s decision to reduce ₹7,000 crore in bulk deposits reflects a broader shift toward stable, low-cost retail funding. By combining retail deposit growth with institutional borrowings, securitisation, and overseas FCNR(B) deposits, the lender is creating multiple funding channels to sustain future loan growth while protecting margins.
With a stronger deposit mix, improving CASA ratio, and diversified funding strategy, Bandhan Bank appears well-positioned to support its next phase of expansion in India’s competitive banking sector.
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