Bandhan Bank insurance income could take a hit if proposed lower commissions on insurance distribution come into effect. The lender could lose ₹200 crore in annual income and is changing its business strategy to help offset the loss.

Bandhan Bank insurance income and the proposed rules

The Insurance Regulatory and Development Authority has proposed changes to third-party product distribution that would reduce commission income for banks. Banks have approached the regulator about the proposal.

Managing Director and CEO Partha Pratim Sengupta said the change would affect the banking industry, not just Bandhan Bank. He said the lender plans to focus more on mutual fund distribution and introduce new products.

Bandhan earned ₹156 crore from distributing third-party products in the second quarter of fiscal 2026–27, with most of that income coming from insurance sales. Its Q2 FY2026–27 financial highlights separately show quarterly profit after tax of ₹622 crore.

Limited exposure to drought-hit states

Sengupta also said the risk from drought in Karnataka and Maharashtra was manageable because the bank had negligible exposure there. Karnataka accounted for about 1% of its unsecured emerging enterprise business, and Maharashtra for 2.6%.

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