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Reserve Bank Of India (RBI) has put a restriction on Bandhan Bank for opening new branches. The RBI has also put a freeze on the remuneration of Bandhan Bank MD and CEO, Chandra Shekhar Ghosh.
The bank said in press release, “RBI has communicated to us that since the Bank was not able to bring down the shareholding of non-operative financial holding company (NOFHC) to 40 per cent as required under the licensing condition, general permission to open new branches stands withdrawn and the bank can open branches with prior approval of Reserve Bank of India (RBI).”
The company added that the bank is working on the process to comply with the licensing condition to bring down the shareholding of NOFHC in the bank to 40 per cent and shall continue to engage with RBI.
As per the RBI’s licensing norms, a private sector bank has to bring down its promoter shareholding within three years of operations to 40 per cent. According to the BSE shareholding pattern, the promoter and promoter group were holding 82.28 per cent stake in the company as of June 2018.
In an analysts call on Saturday, Sunil Samdani, CFO, Bandhan Bank said the bank is looking at inorganic opportunities in MSME finance and affordable housing finance in line with the bank’s overall strategy for growth.
Samdani said, “As per the original plan, we were to get into other financial business like insurance and mutual fund after three years of forming a bank. We will evaluate these businesses going forward to help dilute the stake.”
