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Securities and Exchange Board of India (SEBI) has exempted Bandhan Bank from the norm that mandates promoters hold on to their shares for a year after listing, enabling its promoters to sell-off their shareholding in the bank before March 2019.
Bandhan Bank said in a filing to the stock exchanges, “In continuation to our intimation dated September 28, 2018,it is hereby informed that the Bank has received an exemption from the Securities and Exchange Board of India with respect to (i) lock-in of one year on the equity shares held by the promoter; and (ii) eligibility condition of one year from listing.”
The SEBI regulation mandates a one-year lock-in period for promoter shareholdings after the initial public offering (IPO). Therefore promoters of Bandhan Bank were required to wait until March next year to sell shares, since their shares were first listed in march this year.
Bandhan Bank is currently facing scrutiny as the bank failed to comply with RBI’s guidelines for licensing of new banks in the private sector. The norm states that when a non-banking financial company (NBFC) launches a private bank through a holding company, it must pare down its promoter holding to 40 percent within three years of starting operations.
Thus the banking regulator Reserve Bank of India (RBI) punished the new private sector bank by restricting its branch expansion and freezing the remuneration of its CEO and Managing Director Chandrashekhar Ghosh as the bank missed the deadline which ended on August 23 this year to meet the mandate.
