Bandhan Bank sees about Rs.200 crore hit to insurance-related fee income
Bandhan Bank estimates a yearly fee income loss from Irdai's proposed distribution changes. The lender says it expects to recover most of the shortfall over time.
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what happened
Bandhan Bank expects its income from selling insurance and other third-party products to fall by roughly Rs.200 crore a year if the insurance regulator's proposed distribution changes take effect as drafted. CEO Partha Pratim Sengupta said the change would hit the whole industry, and that the lender is not immune. He added that the bank expects regulators to soften the proposals after objections from banks and insurers.
According to Moody's, citing Mint, the bank earned Rs.156 crore from third-party distribution in the July-September quarter. Net profit reached Rs.622 crore against Rs.112 crore a year earlier, mainly due to lower provisions. To offset the potential loss, Bandhan plans to expand insurance sales in tier 3 and tier 4 towns and sell more mutual funds.
why it matters
Irdai's consultation paper would bring back hard caps on distribution fees and tighten insurers' overall spending limits, so banks could receive less for the same volume of policy sales. For Indian bank shares, this points to pressure on non-interest income if the rules are adopted without changes.
market impact
Indian banks: lower insurance commissions pressure non-interest income if the rules stand
- Bandhan Bank mixed — lost insurance commissions are partly offset by planned new sales channels
- Indian bank shares pressure down — fee caps reduce banks' income from selling insurance products
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sources
- Bandhan Bank sees Rs.200 crore hit to third-party income from Irdai's proposed distribution overhaul — Moody's, 28 October 2026 at 18:04 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
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