MUMBAI (Reuters) - Indian private lender Bandhan Bank reported a 93% drop in fourth-quarter net profit on Friday as it increased provisions and wrote off bad loans.

The Kolkata-based bank's net profit stood at 546.3 million rupees ($6.56 million) in the three months ended March 31, down from 8.08 billion in the same quarter a year ago.

Bandhan Bank's provisions and contingencies jumped to 17.74 billion rupees from 7.35 billion rupees a year earlier.

The bank wrote off bad loans worth 38.5 billion rupees in the January-March period, compared with none in the past four quarters.

These were loans given to small borrowers during the pandemic and were covered by a government guarantee.

However, the loans were being examined by the National Credit Guarantee Trustee Company, an agency set up by the government, the bank said, which could delay a payout of the government guarantee.

The bank termed the write-offs as a "prudent measure".

Its gross non-performing asset ratio - a key gauge of asset quality - improved to 3.84% as of March-end from 7.02% at the end of the prior three months as a result of the write-offs.

Bandhan Bank is set to see a management transition after Managing Director and Chief Executive Chandra Shekhar Ghosh said he would retire on July 9, after spending nearly a decade at the helm.

The lender's net interest income rose 16% on-year to 28.66 billion rupees, while net interest margin stood at 7.6%.

Its loans grew 14.3%, while deposits rose 25%.

Shares of the bank ended 0.9% higher ahead of the results on Friday.

($1 = 83.3322 Indian rupees)

(Reporting by Siddhi Nayak; Editing by Sohini Goswami)