Days after Finance Minister Nirmala Sitharaman requested banks to cease fraudulent gross sales, Bandhan Group Chairman Chandra Sekhar Ghosh mentioned fraudulent gross sales have been on the rise as banks set targets for his or her staff and will cease instantly.
“Positively, mis-selling ought to cease instantly. It isn’t good. It is a goal. In case you (banks) give a goal, it’s going to occur. I’ve all the time mentioned that within the non-public sector there are too many targets. Each morning they focus on what’s the goal for at present. It (banks) shouldn’t be a goal enterprise, it’s a customer support enterprise,” Ghosh, former MD and CEO of Bandhan Financial institution, mentioned in an unique interview.
“For the primary 5 years of operating the financial institution, we did not promote any insurance coverage or mutual fund merchandise. We began after 5 years on buyer demand. In any other case, we would have gone elsewhere. Now, if there’s a mis-sale, we refund your cash inside 24 hours. In case you (employees) do not refund your cash, you might be fired,” he harassed.
Commenting on the current fraud incident involving some non-public financial institution staff, he mentioned there’s a want for elevated vigilance and stronger supervision on the department stage.
“Put up-digital banking, the variety of frauds has elevated. Individuals’s greed has elevated. In NBFCs and microfinance, individuals really feel motivated to work as a substitute of working for cash. This has stored individuals away from cash,” Ghosh mentioned.
He mentioned Bandhan Financial institution had invested some huge cash in coaching its employees. “The coaching shouldn’t be about buying and selling, it’s about motivation. You’re taught in regards to the worth of the shopper’s cash,” Ghosh mentioned. “Integrity has to return from the atmosphere and checks and balances. The creator and the examiner should be totally different individuals. The examiner must be at the next stage. If oversight is troublesome, nobody desires to cheat. Oversight is essential,” he added.
With a view to stop financial institution fraud by staff, he emphasised, “I really feel it’s essential to strengthen monitoring and supervision.We’ll strengthen the loyalty of the individuals.”
A monetary companies veteran from an NGO working for monetary inclusion on the backside of the pyramid has welcomed the Union Finances, which requires a complete assessment of the banking sector by the Vikshit Bharat Banking Excessive-Stage Committee.
“The Banking Regulation Act was enacted in 1949. Later, when India’s financial system was lower than 1 trillion, the state of affairs was totally different. It took 63 years to construct a 1 trillion financial system, however 1 trillion can be added inside the subsequent three years. This can’t be achieved with out the assist of banks. Subsequently, the Act needs to be amended,” Ghosh mentioned.
He mentioned that as a consequence of current restrictions, promoters of banks can not enhance their holdings in banks even when they’ve funds. “If you’re a financial institution MD, you can’t make investments greater than Rs 500,000 to your total household. This wants to vary,” he identified.
“We’re hopeful that the high-level committee can be profitable. At present, current laws are stopping banks from getting high quality board members. A number of points have to be addressed. The norms have to be revised to strengthen banking companies,” he mentioned.
He mentioned Vikshit Bharat wants assist from banks and that it’ll not be potential to create Vikshit Bharat until 85% of Indians, who would not have entry to financial institution loans, are financially included.
“Inequalities in our nation are rising. The financial system is rising, however inequality can also be rising. That isn’t good for the nation. We’d like the banking trade and all companies to work collectively to attenuate inequality. That means, 50 per cent of the inhabitants of Vikshit Bharat will assist the financial system,” he mentioned, including that banking guidelines have to be modified to offer credit score to the “unbanked”.
He mentioned microfinance is a viable enterprise and has the potential to influence many individuals. Because the banking trade is at present making an attempt to mobilize deposits to advertise credit score at reasonably priced prices, Ghosh requested the banking trade to go to rural areas the place individuals have cash.
“We’d like bodily branches in rural areas for the aged and folks with low literacy. Bankers do not need to go to rural areas, so we have to enhance banking expertise in rural semi-urban areas to faucet their potential,” he mentioned.
He mentioned he would open extra faculties and hospitals in rural areas to offer free high quality schooling and healthcare to the poorest individuals. All that is performed by means of philanthropy, as he donated 98% of his revenue to charity, leaving solely 2% for himself.
issued – February 27, 2026 10:28 PM IST
